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China Hopes Pigs Curb Price Surge

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The Associated Press

Published: September 22, 2007

BEIJING - China has begun releasing pigs from its central reserves into the domestic market to counter surging pork prices that have helped lift inflation to 11-year highs, according to a media report.

Prices for pork, China's staple meat, have soared because of shortages blamed on a decline in pig rearing, rising feed costs and an outbreak of a pig disease that killed more than 70,000 animals and infected 280,000 this year.

Under a plan issued jointly by the Ministry of Finance and the Ministry of Commerce, China is releasing 30,000 tons of live pigs from its central reserves from Sept. 10 to Oct. 15, a person who saw the government notice told Dow Jones Newswires on Friday.

The pigs from the central reserves will be released into 22 cities nationwide in stages and will be priced slightly lower than market prices, said the person, who spoke on condition he not be named because he was not authorized to speak on the matter.

In August, meat and poultry prices surged 49 percent from a year earlier, boosting the month's consumer price index growth to 6.5 percent, the highest level since December 1996.

The government has ordered some prices frozen, and told officials to monitor others in its most drastic step yet to contain a surge in inflation.

Analysts said releasing the pigs from the government's reserves likely would have little effect on broader inflation.

'This move is more like a symbolic gesture on the government's part,' said Peng Danxue, analyst at Everbright Securities.

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