The Chinese government reported that it expects positive results from its “macro control” of pork prices in the second half of 2021.
On June 28, the Chinese Ministry of Commerce and other departments declared that the central and local governments would begin the work of purchasing and storing the reserve of pork, as the price of pigs and grains had entered the first level warning range.
Why is this important? China imported $ 11.9 billion worth of pork in 2020, up 164% year-on-year.
In addition, this growth is based on 2019, the year in which those same imports had already climbed at an annual rate of 117 percent.
With this, China established itself as the largest importer of pork in the world, with a 31.4% share in global purchases of this product in 2020.
Following China came Japan (a world share of 11.8%), Italy (5.5%) and Germany (4.4%).
Worldwide, imports of this product totaled $ 37.9 billion.
“Stable pork prices are not only related to pork production, but also to people’s lives. The main objective of macro control is to avoid big ups and downs and that high prices hurt people and low prices hurt farmers, ”said Gao Feng, a spokesman for the Chinese Ministry of Commerce.
In the next step, the Chinese government plans to continue to do a good job of maintaining supply and stabilizing prices in the pork market: on the one hand, it will do a job of adjusting reserves on the basis of «research scientific and market trend judgment”, while conducting the procurement, storage and release of pork in a timely manner.
On the other hand, the Chinese government will strengthen the publication of information, reasonable guidance of expectations, understanding of market supply and demand through channels such as key national wholesale markets and typical retail companies, and publication timely in the form of business forecasts.
In this way, according to Gao, the government will avoid the panic that information asymmetry can cause and stabilize market expectations.