Cina cannot even feed the people properly

 

China tapping national pork reserves will not satisfy shortage of the  meat

• Use of national reserves shows how deeply crisis has shaken China, where pork is crucial part of the diet and symbol of well-being
• The nation is in the grip of an African swine fever epidemic that could wipe out half its pig population by the end of the year, analysts warn

 

China has begun to tap its national pork reserves, a sign of Beijing’s urgency to curb widespread discontent over the sharp spike in pork prices, but analysts warn that stocks are nowhere near big enough to keep the popular meat on dinner tables across the country.

China is in the grip of an African swine fever epidemic that could wipe out half its pig population by the end of the year, with officials also scrambling to ratchet up pork imports to help fill the gap.

The government’s tapping of the national reserve is evidence of how deeply the crisis has shaken China, where pork is not only a crucial part of the diet, but also a symbol of a family’s well-being.

“Securing the supply [of pork] affects people’s livelihoods and overall situation,” vice-premier Hu Chunhua said last week, adding that Beijing would use all means at its disposal to keep the supply flowing.

The meat reserve scheme was created in 1996 to help stabilise food prices during emergencies. Both the national and provincial governments keep pork reserves, which are tapped when the supply is threatened.

The central government announced at the end of August that it would start to release frozen pork reserves into the market, but local governments started acting earlier. The Hainan provincial government has been injecting frozen pork into the market since August 28 and plans to release 1,520kg before September 12. Cities in the Guangxi autonomous region and Fujian province are also believed to have started to eat into their pork reserves.

However, even combined with imports, this will not fill the gap left by African swine fever, in a country where every person consumes the equivalent of half a pig each year, according to Zhang Lichen, at the state-owned Heilongjiang Agricultural Investment Corporation.

China’s entire frozen pork reserves amount to roughly 990,000 tonnes, according to Lei Yi, an analyst at China Merchant Securities. “The impact is really limited, compared to the supply gap of over 10 million tonnes,” he said.

And the problem is likely to get worse before it gets better. China’s pig population is forecast to drop by around 50 per cent this year, according to a quarterly report of Rabobank released in July.

 

That would mean a pork shortfall of about 13 million tonnes, given the annual pork production of 54.03 million tonnes last year, according to the data of the National Bureau of Statistics, meaning prices will remain high.

“It takes at least seven to eight months for newborn pigs to mature and go to the market,” a pork supplier named Wang selling at Xinfadi, the largest pork wholesale market in Beijing. “We will not see the turning point until the next year.”

Trade war tariffs of up to 72 per cent on US frozen pork imports have effectively cut American farmers out of the Chinese market, meaning buyers in China have had to look to pig farmers in new markets like Argentina and Portugal to try and fill the gap.

However, even with American supply, there would not be enough pork in the world to satisfy China’s demand. The US Department of Agriculture estimated that total worldwide pork exports in the first 10 months of this year will be 8.8 million tonnes.

If China was to import all the tradeable pork in the world and use up all its frozen reserves, there would still be a supply deficit of around 6 million tonnes.

Release of the government reserves could keep prices down in the short term, said Feng Yonghui, chief analyst at pork industry portal Soozhu.com. “The government would play the role as a large supplier, using greater supply to influence the price on the entire market,” he said.

But whether this can help keep a lid on social discontent remains to be seen. It is difficult to overstate the importance of pigs and pork in China. The meat is used by ordinary residents as a gauge of their own standard of living, but also has deep cultural and historical importance.

As early as the third century, the Erya, the oldest surviving Chinese dictionary, listed pigs as one of the six main domestic animals. During the Great Leap Forward between 1958 and 1961, communes were emblazoned with posters showing giant pigs, and sows with many piglets, to promote agricultural success as a symbol of wealth.

The Chinese character for the home, meanwhile, depicts a dwelling with a pig inside it, emphasising just how deeply the connection runs. Given this background, the government knows it must act – particularly since the crisis is taking place in the Chinese Year of the Pig.

“Most families cook pork every day, either buns or dumplings, or soup, especially those living in the central and northern regions,” said Zhu, a Guangzhou restaurateur in his forties, who suggested that pork connoisseurs may not be appeased by the government’s efforts.

“We are now using frozen pork to cut costs, but it does affect the taste, and some restaurant guests can tell and complain that they do not like frozen meat.”