Inflation continues to rise in China, with pork the latest culprit in increasing already high food prices.
Over half of the meat consumption in China is pork, and China produces and consumes more than half of the world’s pigs. This means that when pork prices go up, inflation goes up. According to the UPI, “pork prices in June surged 57.1 percent year- on-year, accounting for 21 percent to China’s inflation which soared to a three-year high of 6.4 percent in June, far above the government target of 4 percent.”
This has even lead China to release its “pork reserves,” a stock of pig meat set up in 2007 to help aid in this very type of scenario. But, according to the New York Times, the reserve is too small to have a strong effect on demand and will most likely not affect pork prices.
Pork prices are expected to stabilize by August, but, as Bloomberg points out, there have been similar surges in prices of key food items throughout Asia this year, including onion and chilli shortages in India and Indonesia respectively. This is leading to worries of inflation in Asia, where food makes up more than 30% of inflation indexes (even 45% in the Philippines and India), compared to 15% in Europe and 10% in the Unites States. This is because food takes up such a larger part of consumer expenses in developing countries where income for the poor is low, and where high prices can be devastating.
The Chinese themselves eat four times as much pork in 2007 as in the early 1990s, though per capita they still eat less than Denmark, according to the New York Times.
As demand increases with China’s rapid development, worries about inflation increase not only in China but worldwide, such as when the drought afflicting China’s wheat fields last March stoked scares of a global increase in wheat prices.
