Mar 23, 2020 06:46 PM

Falling Pork Prices Set to Take a Slice Out of Inflation in China

Falling pork prices are expected to lead to a slowdown in China’s consumer inflation later this year as hog production gains momentum after the devastating impact of African swine fever.

Peng Shaozong, a National Development and Reform Commission (NDRC) official, told a press conference (link in Chinese) last Thursday that prices for this major driver of consumer price index (CPI) growth had already started to decline.

He said the average price of lean pork meat in 36 large and medium-sized cities fell to 64.4 yuan per kilogram on Wednesday, down from the highest price in February of 69.3 yuan per kilogram.

China’s CPI, which measures the prices of a basket of consumer goods and services, rose by 5.2% year-on-year in February.

The relatively high inflation was driven largely by surging pork prices, which contributed 3.2 percentage points of the CPI increase, according to (link in Chinese) the National Bureau of Statistics (NBS).

In February, the average pork price in China surged by 135.2% year-on-year, the data showed.

The first case of African swine fever was reported in China in August 2018. The devastating disease has since wiped out a significant portion of the country’s hogs and caused severe pork supply shortages and soaring prices.

Last year, China’s pork production fell by 21.3% to 42.6 million tons, NBS data showed (link in Chinese).


The number of China’s breeding sows monitored by the agriculture ministry rose 1.7% month-on-month in February, the fifth consecutive monthly increase after stocks began to recover from the outbreak, according to data (link in Chinese) from the ministry.

Some are less optimistic than the NDRC official. Economists with Nomura International (Hong Kong) Ltd. expect a shortage of hog and pork supplies will continue in the coming months due partly to hoarding linked to the coronavirus outbreak.

As a result, hog and pork prices will stay relatively high, especially in large cities, the economists said in a March 10 research note.

The economists forecast CPI inflation would drop to 4.8% in March as meat prices usually fall after the Lunar New Year holiday. However, it would rebound to 5% or even higher due to rising meat prices, they said, adding that the coronavirus supply shock will cause a short-term lift.

Economists with China International Capital Corp. Ltd. wrote in a March 10 report that as the virus spreads rapidly overseas, uncertainty about China’s external demand will also rise. Also, global oil prices have plunged heavily.

Those factors add deflation pressure to the core CPI, which excludes more-volatile food and energy prices and better reflects long-term inflation trends.

Contact reporter Tang Ziyi (

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