Zhongpin expects hog prices to remain steady
November 22, 2010
by Meat&Poultry Staff
CHANGGE, China – Zhongpin Inc. said the outlook for hog and pork prices in China are expected to remain steady, given the recent measures issued by China's State Council.
"We noticed that China's State Council issued 16 measures to stabilize consumer prices and to ensure market supplies,” said Xianfu Zhu, chairman and CEO. “Excluding direct price intervention items, the 16 measures focus on production development, stabilization of supply, reduction of delivery costs, standardization of market order and enhancement of market supervision."
Hog prices have maintained a slight rise since early October 2010 and in that period have hit a high for the year to date. Pork prices have generally also risen during this fourth quarter of 2010.
During the second half of 2010 the hog breeding industry in China has become profitable. Rising hog prices further increases breeders' profits and encourages farmers to replenish hog stocks. Currently in the hog market, supply and demand are essentially in balance. Therefore, the trend for hog prices is expected to be steady by the end of this year.
"China's pork market is market-oriented and heavily influenced by demand and supply, so the Chinese government generally adjusts the market by implementing policy using its frozen pork reserve instead of imposing direct price intervention measures,” Zhu said. “As a pork reserve participant, Zhongpin should benefit from changes in China's frozen pork reserve."
All 16 measures issued by China’s State Council are boost agricultural production; stabilize supply of agricultural products; reduce the delivery cost of agricultural products; ensure supply of fertilizers; coordinate coal, power, and oil and gas supplies; disburse temporary price subsidies; establish coordinated social-security mechanism linked with price rises; continue to implement the provisions for standardizing charges; actively and steadily push forward price reform; standardize management and processing of agricultural products; intensify supervision on futures and electronic transaction market of agricultural products; improve laws and regulations for price supervision; strengthen price supervision and inspection and anti-price monopoly law enforcement; enhance price information release system; hold provincial governors accountable for the prices of 'rice bags' and make mayors responsible for 'vegetable baskets’; and establish inter-ministerial joint conference system for market price control.
Zhongpin Inc. is a meat and food processing company specializing in pork and pork products, vegetables and fruits in China. Its distribution network in China covers 20 provinces plus Beijing, Shanghai, Tianjin, and Chongqing and includes more than 3,285 retail outlets. Zhongpin's export markets include the European Union, Russia, Hong Kong, South Africa, and Southeast Asia.