China’s restaurants on survival mode as African swine fever fuels costs, dents business ahead of Lunar New Year

Pork prices are set to climb again between now and Lunar New Year in January, according to Nomura

China is seen importing a record 4.6 million tonnes of meat in 2020 to plug supply shortfall, Rabobank forecasts

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A scene from a pork wholesale market in Beijing on November 18, 2019. Photo: EPA-EFE

Published: 1:28pm, 25 Nov 2019Updated: 2:18pm, 25 Nov 2019

A doubling in pork prices since the outbreak of deadly African swine fever in August 2018 is pushing the domestic inflation rate in China to the highest in almost eight years. For some of the nation’s small entrepreneurs, it’s approaching a breaking point.

“We are not able to make a profit due to the higher costs of buying pork meat,” said Wang Xuliang, owner of the Yi Mian Qian restaurant chain in Shanghai. “It is becoming more difficult to sustain our business after having to pay higher rent and labour costs.”

Wang purchases about 1,000kg of the meat every month for his chain, which serves small dishes including dumplings, noodles and rice. Over the past one year, he has had to pay an additional 30,000 yuan (US$3,550) a month after prices doubled to 58 yuan a kg, he said.

Pork accounts for up to 60 per cent of total meat consumption in China, and the outbreak of swine fever has caused a devastating impact at a time when the economy is growing at the slowest pace since at least 1992 amid a heightened trade war with the US.

Consumer prices rose 3.8 per cent in October, a level not seen since January 2012, official data showed. Wholesale pork prices surged to 52.30 yuan per kg on November 1, before easing to 47.60 yuan, according to the Ministry of Commerce, up from about 20 yuan before the outbreak.

The crisis has forced the government to cull 41 per cent of its hog population, creating a potent brew on both ends of demand and supply. Pork prices could rise to about 65 to 75 yuan per kg between now and Lunar New Year in late January, according to Nomura.