China has nearly exhausted its reserves of frozen pork, according to new estimates that underscore the supply shortfall in the world’s top protein market two years after the arrival of African swine fever. The level of reserves is a state secret in China, the world’s number one producer, consumer and importer of pork. But Enodo Economics, a London based consultancy focused on China, estimates that reserves fell by about 452,000 tonnes between September 2019 and August this year.
China has less than 100,000 tonnes of pork reserves remaining, says Diana Choyleva, Enodo’s chief economist. “At this rate, within two to three months they’ll be out,” she added. The numbers back up comments from the US agricultural attache in Beijing in a recent livestock report on China, which noted that “pork reserves appear to have been mostly depleted by the third quarter of 2020”.
The country reported its first case of African swine fever in 2018. Since then, more than 100m pigs have been lost, pushing pork prices up to record highs. In response, China has sold frozen meat from its reserves into the domestic market to try and restrain prices.
Despite inching down from their highs, spot wholesale prices are still more than double their pre-swine fever levels at Rmb47.61 ($7) per kilogram. The cost of pork to consumers rose more than 50 percent in August from a year earlier, according to official data. China’s pork reserves prove no match for supply shortfalls
The pork reserves act to stabilize high prices rather than to provide a replacement for tight supplies. The decline in reserves means that Beijing’s “ability to directly intervene in the pork market will be more limited in the second half of 2020 and into 2021”, warned the USDA report.