Pork prices in China soared 46.7% year-on-year in August, as the country faced rising shortage of the meat amid a swine fever outbreak which has killed millions of hogs.
That was a far bigger increase than July’s pork prices which jumped 27% from a year ago.
The surge in pork prices contributed to a 10% gain in food prices overall in August, according to data released by China’s National Bureau of Statistics on Tuesday.
As much as half of China’s hog population was estimated to have died from the protracted swine fever outbreak, which was discovered more than a year ago. China’s pig herd could halve by the end of this year, according to a July forecast by analysts at Dutch bank Rabobank.
Prices of other meats in China also rose in August, contributing to the jump in food prices. Beef, mutton and chicken prices were all up — between 11.6% and 12.5%.
Fresh fruit prices continued to increase in August, jumping 24% year-on-year, but saw a smaller increase than July’s roughly 39%.
Overall, the producer price index (PPI), a key barometer of corporate profitability, in August dropped 0.8% from a year earlier — the worst year-on-year contraction since August 2016.
The consumer price index (CPI) in August rose 2.8% on-year, unchanged from July. That compared with a 2.6% increase predicted by analysts.
Consumer prices in the country are set to go even higher, according to a Tuesday note from research firm Capital Economics.
“Consumer price inflation should accelerate in the coming months as pig stocks continue to fall and the drag from lower oil prices eases,” economists Julian Evans-Pritchard and Martin Rasmussen wrote in the note.
“But the upcoming (reserve requirement ratio) cuts announced last Friday are in line with our view that rampant food price inflation is not a barrier to monetary easing, and we continue to anticipate further loosening in the next few quarters,” they wrote.
They were referring to the Chinese central bank’s announcement on Friday that it was reducing the amount of funds that banks have to hold in reserve, as the country seeks to further stimulate its economy.