Pinoyagribusiness

China looks back and forward at year of the pig
Posted: Monday, February 11, 2008 11:44 AM
Filed Under: Beijing, China

 

By Ed Flanagan, NBC News Researcher

China may have run in the year of the rat this week, but the nation's heart is still hungrily set on the pig.

With pork prices having jumped over 50 percent in the past year, national attention has shifted to the ever escalating prices for basic foodstuffs. Pork is a staple in the Chinese diet – 65 percent of the 110 lbs of meat the average Chinese eat each year is pork – and the near daily increases in price here have become a banner issue for poor and middle-class Chinese. Now with some of the most severe rates in years, government officials here are quietly wondering if unchecked inflation could potentially lead to a repeat of the public incident that followed the last period of economic hardship.

The pork price hikes have come as a result of factors arising both domestically and abroad. In China last year, blue ear disease ravaged the pig population during what was an already poor production year due to low 2006 prices. Meanwhile, the demand for corn and maize for ethanol production raised global prices for livestock feed, making it far costlier to raise porkers fit for the market. Most recently, the severe cold weather and storms that have hit central and southern China – traditionally regarded as the nation’s breadbasket – have destroyed much of the season’s crop across the board and wrought further havoc on prices nationally.

The biggest contributor to the inflation rate though is the booming Chinese economy and the rapidly growing incomes that it has brought. To the government’s credit, the nation has pulled millions of people above the poverty line in the past decade. However, with this new economic flexibility has come a greater consumption of meat as the population increasingly shifts to a western style diet that features more meat.

The consequences of this swine shortage and the public’s affinity for pork on their dinner plates are now playing out in China’s markets. During a recent visit to the Pifa Wholesale Market in Beijing for another story, one butcher noted that because of pork’s reputation in China as being the affordable meat, the runaway inflation has irked customers and caused them to go out in search of a better deal.

"When pork prices went up, people started buying chicken. When chicken prices went up they switched to fish," he said. "People remember how cheap pork used to be, so it’s hard for them to understand why it’s so expensive today."

It is that question that has become a source of serious concern for the Chinese government, which has the unenviable task of having to somehow explain to its outraged populace how even with a pig population of 500 million (compared to a US population of just 100 million), it has been largely unsuccessful to curb runaway prices.

While the government has made use of price freezes in the past to temporarily halt rising inflation, the government’s other key mechanism for controlling prices is the much vaunted "strategic pork reserve" – a network of government warehouses full of frozen pork. Much like the US government in certain situations will use its own strategic petroleum reserve to help control domestic prices, China has injected pork into the market during moments of rapid inflation or politically sensitive times to ensure a steady supply and reasonable prices.

The pork reserve has been a critical component of the Chinese government’s battle with inflation as it has allowed officials to create positive publicity around their attempts to manage the inflation. Without question, the potential for civil unrest that might follow continued inflation is a source of considerable concern for a government that is always weary of the many millions of Chinese who have not prospered under China’s economic miracle. The 30,000 tons of pork the government pumped into the market last September and the thousands more it injected just this past month in anticipation of the Chinese New Year festivities was as much a nod of deference to the hundreds of millions quietly toiling in the countryside as it was a move to placate the far more vocal urban population.

As distant as China’s pork problem may seem in the United States, Americans should be concerned about the ramifications of a nation of 1.3 billion people unable to raise enough pigs to satiate its enormous appetite. Outside of China, there is a great deal of concern over the side effects of the Chinese pig industries’ rapid transformation into a US style system of consolidated farms. Eager to improve production with new farms that boast populations of over 1,000 pigs in close quarters, new strains of the blue ear disease that ravaged the population last year are popping up, creating the potential for new super viruses that could inhibit continued growth in the pork industry.

China has already started to import U.S. pork to supplement its poor production last year, striking a deal with American pork producer, Smithfield Foods Inc. in September of last year to export 60 million pounds of pork. While some believe that the relatively small Smithfield deal will pave the way for greater U.S. penetration into the Chinese pork market, should there be another mass culling of Chinese pigs due to illnesses like blue ear disease, Americans can expect higher pork prices as China looks to the U.S. to meet its own market demand.

Perhaps of greater concern to Americans though is the fear that China could eventually respond to the increasing cost of producing domestic corn and livestock feed by beginning to import more from abroad. Should China elbow its way into the world grain trade, the combined effects of more corn being siphoned off for ethanol production and feeding China’s 500 million pigs could lead to soaring global grain prices.

Whether global grain prices rise substantially or not, should pig prices continue to skyrocket in China, expect this researcher to drop everything and follow in the footsteps of Wang Chao, a 22-year-old college junior here in China who last April dropped out of school to take up pig farming and cash in on what is quickly becoming a proverbial golden trough.

Fat of the Land: Beijing has tapped the country's official 'pork reserve'
By Melinda Liu and Sam Seibert | NEWSWEEK
Feb 11, 2008 Issue

(http://img153.imageshack.us/img153/6658/080201ps20widehorizontawo7.jpg)


A new breed of criminal has emerged in China: "pigjackers." Soaring pork prices in the People's Republic have sent thieves roaring off with truckloads of hogs—and sometimes with smaller hauls, as was the case with the gang that was busted last year in Shenzhen trying to make off with 275 pounds of pork on a motorbike. A local newspaper valued the meat at upwards of $420, or roughly three times what a stolen motorbike might fetch in the city. Police easily caught the getaway bike; it couldn't handle all that weight.

The porcine crime wave is no joke to China's leaders. They see it as a sign of a much larger problem: even more than they worry about a repetition of Tiananmen Square, they dread the kind of mass unrest that could erupt out of a spike in pork prices. A full 65 percent of the country's total protein consumption is pork. The threat of a spontaneous uprising has been made worse by a freak blizzard that paralyzed central China last week—the region's worst in 50 years—stranding mobs of migrant workers on their way home for the Lunar New Year and disrupting shipments of the pig meat that is essential to holiday feasts. Food prices in general, and pork in particular, have been skyrocketing for months. Economic boom times are boosting demand even as the supply has plunged because of shrinking farmlands, rising grain prices and a "blue ear disease" epidemic that forced pig raisers to cull many thousands of hogs.

In an effort to head off serious trouble, Beijing has tapped the country's official "pork reserve." That's no joke, either; it's the actual term for the special stash of meat the Chinese government keeps frozen in case of a sudden crunch—not unlike America's Strategic Petroleum Reserve. But snowbound shipments of pork probably won't reach many Chinese families' tables in time for the holiday. And the country's underlying agricultural shortages will only get worse. The prospect is something for the whole world to worry about. Experts predict that China, long a major exporter of corn products, will soon become a net importer—possibly this year. When that happens, global grain prices could jump like this year's oil market.


© 2008

March 13, 2008

 

China's pig disease problems caused by modified Blue Ear virus

 
A modified strain of the Porcine Reproductive and Respiratory Syndrome (PRRSV) could be one of the primary culprits of the severe mortality rate of pigs in China, which has gripped the country's pig industry since 2006.

 

According to a report by the Dutch Animal Health Service, both swine fever and circovirus played important roles along with PRRS or Blue-Ear disease in the outbreaks of animal diseases in China.

 

Pig diseases in the country have killed nearly 100 percent of young animals, driving pork prices to skyrocket.

 

Recent tests revealed that 25 to 50 percent of pigs that are 30, 65 and 105 days old respectively died from the virus.

 

Sows are also giving birth to dead piglets which are infected with the virus.

 

Tom Duinhof, swine specialist at the Dutch Health Service, said that the virus found in these animals varies from the strain in Europe and the US.

 

Duinhof explained that although it is unclear whether the change in PRRS virus is the reason for severe symptoms of the pigs, there is a possibility that the change in virus is recent and appeared in 2006.

 

He added that an RNA-virus changes quickly and which is difficult to counteract.

 

PRRS causes reproductive failure in breeding stock and respiratory tract illness in young pigs. Initially referred to as mystery swine disease and mystery reproductive syndrome, it was first reported in 1987 in North America and Central Europe.

March 11, 2008

 

China pork prices drop in latest week, yet to remain high for some time

 

China's pork prices fell 0.75 percent in the week ending March 7, at RMB14.65 (US$2.05) per 500 grammes, the National Development and Reform Commission (NDRC) said on Monday.

 

Pork prices were 1.6 percent lower than on February 3, when they were at RMB14.80 (US$2.08) per 500 grammes.

 

However, pork prices are expected to remain strong generally due to high demand and the decline of hog population in the country, a senior government official said.

 

Wang Zhicai, director general of the Department of Livestock Husbandry, said rising production and labor costs as well as increasing demand will keep prices high, although the hog population has recovered since blue ear disease affected the industry last year.

 

Chinese assistant commerce minister, Huang Hai, said over the weekend that it would take longer than the government had previously forecast for China's hog population to return to a level high enough to satisfy market demand.

 

Last year's surge in pork prices was a key driver of inflation in China.

Chinese to increase pork imports in 2008// 12 Mar 2008


Pork consumption continues to outstrip production in China, resulting in higher import projections for 2008.

 
The USDA's agricultural attaché in Beijing commented in a semi-annual report that livestock production had been disrupted by the worst snowstorms in 50 years during January and February and a slow recovery from porcine blue ear disease.

Imports
An 8% rise in pork imports is predicted in 2008 to 200,000 metric tonnes along with a 6% decline in exports to 330,000 metric tonnes.

The report put 2008 domestic pork production at 42 million metric tonnes, up 1% from 2007, but still 16% below 2005.

Production
Chinese pig production is undergoing a shift from small backyard operations to large commercial farms.

50-60% backyard operations have abandoned swine production while the number of commercial farms has increased 20% in the last few years.

The report said US-based Whiteshire Hamroc Co and China Tangrenshen Group in Hunan Province have signed a contract to import 2,000 breeding pigs for a large commercial hog development project.