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BIZCHINA / Weekly Roundup

Soaring prices of pork and eggs

(Xinhua)
Updated: 2007-05-24 09:48

Along with temperature hikes, blue ear disease, also known as Porcine
Reproductive and Respiratory Syndrome (PRRS), broke out among pigs in
south China's Guangdong Province and Guangxi Zhuang Autonomous Region,
causing many deaths and a large amount of pigs to be culled, according to
the National Development and Reform Commission. Officials from the
Ministry of Agriculture, which is in charge of agricultural production
and animal husbandry, declined to make any comment on the issue.

The outbreak can be seen as an immediate cause of a short supply in the
regions, which need to buy pigs from northern provinces, according to Xu
Lianzhong, a senior economist with the price supversion center under the
National Development and Reform Commission.

"This sent a strong signal for distributors to jack up prices, "said Xu.

Xu said this had exacerbated the unbalanced supply and demand of recent
years.

"Pig raisers kept making losses over the past couple years and they are
reluctant to raise pigs. This led to a marginal decline in population of
live pigs for the current year."

Still worse, edible oil and grains underwent price hikes at the beginning
of this year, and feed prices followed suit. The mounting raising cost
for pigs and poultry brought about price hikes for pork and eggs,
according to Xu.

Grain prices, which are expected to be affected by a decline in output
this summer, would continue to increase slightly in the coming weeks,
boosting prices of pork and eggs, Xu said.

Price of eggs rose 30.9 percent in April, according to the Ministry of
Agriculture.

Xu predicted that egg prices would soon stabilize as egg supplies could
be replenished quickly, but it was unlikely that pork prices would fall
in the next one or two months due to the longer production cycle.

However, Xu said, pork prices have already peaked and have litte room to
rise further.

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