Commodities

Happy holidays? Not in China if frozen pork is on the table

Credit: REUTERS/Jason Lee

China's supermarkets are topping up their meat counters with frozen pork from state reserves, after prices of the nation's favourite protein source surged to budget-busting levels, threatening to mar this week's National Day festivities.

China has released 30,000 tonnes of reserve pork this month

Aims to keep lid on soaring prices ahead of holidays

Consumers say volumes too small, frozen meat not appetising

BEIJING, Sept 30 (Reuters) - China's supermarkets are topping up their meat counters with frozen pork from state reserves, after prices of the nation's favourite protein source surged to budget-busting levels, threatening to mar this week's National Day festivities.

Pork, which has a prominent place at nearly every Chinese dinner table, is in short supply after a deadly virus infected and killed millions of hogs across China over the last year.

Beijing has stepped in to try and quell prices that have jumped to almost double what they were a year ago and are still climbing, releasing 30,000 tonnes of pork in three batches over the last fortnight.

That appears to have dampened further price increases for now and helped sales, at least in the capital Beijing.

"Pork is selling much better compared with three weeks ago," said a butcher at the Qianxi Street branch of Yonghui Superstores in southwestern Beijing.

"Today we have very cheap frozen pork belly, it's only 17.98 yuan (per kg, or $2.52 per pound) compared with 35.98 yuan for fresh," he said. "We're not sure where the meat is from but it must be from Beijing's reserves."

Cheaper meat will be a relief to many ahead of the holidays. Chinese typically gather for elaborate meals during festivals, and most of the repasts will feature pork in some form.

Sufficient pork supply is a "most basic requirement" for the people's welfare, said Vice Premier Hu Chunhua in a televised message to officials in late August. He urged them to guarantee supplies and increase the scale of reserves.

Shoppers in Beijing said they will not skimp on meat during the National Day holiday, whatever the price, although they have been reducing their intake at regular mealtimes.

"Before I would buy four or five ribs, but now I only buy two or three, as long as it's enough for a meal," said a retiree surnamed Wang shopping at the Yonghui store.

Many people are substituting chicken, duck or beef for some of their pork intake, with pork so pricy that even more expensive meats now appear affordable.

For some, however, it is hard to stomach a change in diet.

"My family doesn't like beef, it's a heating food, so I can only buy pork," said Wang, referring to the classification of foods as either "heating" or "cooling" in traditional Chinese medicine.

DROP IN THE OCEAN

State sales will have limited impact on prices overall, said Miranda Zhou, an analyst at Euromonitor, with total reserve volumes sold in recent weeks just a "drop in the ocean" in a country that eats about 40 million tonnes of pork a year.

News of the latest sale from state food stores was trending on Weibo, China's popular microblogging site, with many users commenting on how reserve pork had done little to cool prices.

Others questioned the quality of pork that had been in storage, describing it as "zombie meat".

"In addition to the small volumes, in the south they like fresh pork, so frozen pork really isn't appealing," said Zhou, the analyst.

A man surnamed Zheng shopping in a wet market in downtown Nanning, 2,000 km (1,250 miles) south of the capital, said he had not seen any frozen meat on sale there.

"We don't eat that kind of stuff here," he said.

"Even if there was frozen pork, we wouldn't buy it. We only eat fresh meat." ($1=7.14 yuan)

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(Reporting by Dominique Patton in Beijing, Hallie Gu in Nanning, Jiang Xihao in Shanghai and the Beijing Newsroom; Editing by Tom Hogue)

((dominique.patton@thomsonreuters.com; +86 10 5669 2121; Reuters Messaging: dominique.patton.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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