China chops tariffs on pork as soaring prices make it tougher to bring home the bacon - The Washington Post

AFP/Getty Images People shop for meat at a newly opened supermarket in Binzhou in China’s Shandong province, on Dec. 19. Pork prices have soared this year as an outbreak of African swine fever decimates hog herds.

BEIJING — It has caused soaring inflation rates, spurred organized crime and forced authorities to unlock strategic reserves.

The pork shortage, in other words, is a very big deal in China.

As the country heads into a crucial holiday period, the government is escalating its fight against one of its most vexing domestic challenges by slashing tariffs on pork to stoke imports, ease prices and potentially forestall grumbles from working-class consumers.

The tariff cuts, announced Monday, are the latest in a package of measures unveiled by various ministries after the country’s hog population was devastated this year by an outbreak of African swine fever. The disease is highly contagious and often fatal for pigs but does not affect humans. There is currently no vaccine.

The tariff drop comes days after the Commerce Ministry said it would release an additional 40,000 tons of the meat from the nation’s strategic pork reserves to keep prices steady.

China in November recorded its biggest consumer inflation jump since 2012 after pork prices more than doubled from a year earlier due to a shortage of the meat, a staple food for many Chinese households.

[A terrible pandemic is killing pigs around the world, and U.S. pork producers fear they could be hit next]

That, in turn, has led to sticker shock spreading beyond the pork aisle in Chinese markets: consumers are paying between 11 and 25 percent more for other sources of protein, such as beef, chicken and eggs, according to China’s National Bureau of Statistics, at a time when the economy is slowing.

Top officials say they want to keep prices in check before the Lunar New Year holiday week in late January, when many Chinese families gather to fold pork dumplings, dive into bowls of braised pork belly and sip soups with pork meatballs.

Wen Tiejun, an expert in macroeconomics and sustainability at Renmin University in Beijing, said Chinese experts are trying to figure out why prices have been skyrocketing as much as they have.

“Pork prices are rising too fast,” Wen said. “I’m afraid it’s not even a simple relationship of supply and demand, insufficient production or the epidemic.”

Qilai Shen

Bloomberg

A man sits on a motorcycle next to pig carcasses hanging from a conveyor at a pork wholesale market on the outskirts of Shanghai on May 28.

The pork dilemma has spiraled to the point that domestic prices may be distorted by pork speculators, Wen said. He added that Chinese consumers, who eat half the world’s pork, may turn to other meat if prices stay high by the Lunar New Year.

Since summer, Chinese leaders have summoned all hands to tame pork prices. Economic planning authorities promised land permits, loans and subsidies to pig farmers to stoke production. The Transport Ministry doled out free toll passes for trucks carrying pigs.

Even at the height of trade tensions with the United States, the Commerce Ministry exempted American pork from import tariffs. As part of the deal announced this month, Chinese officials have promised “significant transactions” with U.S. hog farmers.

[China loves its pork, but prices are rising and that could be a problem]

At a moment when the ruling Communist Party says it has more or less delivered a “moderately well-off” life to its citizens, rising pork prices could “undermine the image of the party and the government,” the Financial Times quoted Vice Premier Hu Chunhua as saying to top party officials during a September meeting.

The ups and downs of pork prices are often headline news and conversation starters across China. On social media outlets such as Weibo and the Chinese version of TikTok, users ironically film themselves showing off thick cuts of bacon like prized jewelry.

The country was scandalized this month by state media reports disclosing the existence of “pig speculation syndicates” that use flying drones to drop food tainted with African swine fever onto hog farms. The gangs then strike deals with panicked farmers to buy pigs at a discount to sell elsewhere in the country, according to the outlet China Comment.

Agriculture Ministry officials last week promised a crackdown on the syndicates and established tip hotlines, while at least one leading pig producer said it was using signal-jamming equipment to secure its farms in Manchuria from unwelcome flying objects.

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2019-12-23 13:33:00Z
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