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By Wang Yingying, Department of Macroeconomic Research, DRC

Research Report, No.117, 2019 (Total 5617) 2019-7-19

Abstract: Affected by African swine fever, the total number of hogs and propagating sows in stock has hit a record low, pig breeding cost keeps rising and pork production capacity drops rapidly. According to the historical statistics and hog growth span analysis, the present round of pork price increase may continue till the end of 2021 and even beyond. Although the continuous increase of pork prices will not become a decisive factor in boosting inflation, the long-term rise in pork price and its transmission effects onto other food prices will be an important incentive to drive up CPI growth. If the resonance between pork and oil rising prices gets formed and the prices of pork, tobacco, alcoholic, vegetables and fruits also shoot up, the multiplying effect may cause a fast upward rise in CPI. And it is likely that the annual CPI growth in 2019 would exceed 3%. In order to effectively hold in check the rising price of pork, it is suggested that the supply of pork be increased through more channels so as to gradually narrow the gap between supply and demand. Besides, a plan for risk prevention needs to be formulated to cope with the emergencies and unstable factors in order to avoid volatile fluctuations in the pork market.

Key words: pork price, CPI, hog stock