China’s pork supply worries increase as local authorities offer discounts to quell rising anger over soaring prices

Local governments in China have moved to quell increased anger over rising pork prices by offering discounts on purchases of the country's most popular meat, which has seen its supply hit by the outbreak of African swine fever.

Customers are only able to buy a small quantity of discounted pork every day, suggesting the serious supply shortage will keep pressure on pork prices and test the government’s ability to control public discontent.

In Nanning, the capital city of southern China’s Guangxi autonomous region, coupons have been distributed since Sunday offering a 10 per cent discount on the average market price for pork over the previous 10 days, according to the government-backed Nanning Evening News.

The discount, though, will only be available at 10 pilot sites, with each local resident restricted to just 1kg per day.

Feng Yonghui, chief analyst at industry portal Soozhu.com, believes the discounted meat has been taken from the government’s frozen pork reserves, although some residents said they would not buy the frozen meat despite the discount.

“We locals still like to eat fresh meat, it is still hard for us to accept frozen meat. I don’t go to the pork stalls often any more because [pork is] too expensive,” said Li Liqiong, a 65-year-old Nanning resident, who added that worries over the African swine fever virus and antibiotics left in the pork have pushed him towards alternative meats such as chicken, duck and fish.

Across China, pork prices have doubled since July, reaching record highs of 30 yuan (US$4.2) to 33 yuan per kilogram, surpassing analyst expectations. Pork prices peaked at 31.56 yuan in June 2016, according to the Ministry of Agriculture and Rural Affairs.

Feng believes the programme in Nanning is part of a national control measure triggered when the price of pork rose above a certain level, suggesting similar discount programmes could be implemented in other cities and provinces.

A discount programme already existed in a few southern cities in Fujian province, and Feng expects the measures to remain for the rest of the year as the peak seasonal demand has not yet been reached.

The Licheng district government of Putian city in Fujian province will, from Friday, offer residents a subsidy of 4 yuan per kilogram for pork purchases of up to 2kg per person.

Consumers in Xiaman, another city in Fujian, have already been restricted to 2.5kg of subsidised pork per day since the start of August.

The moves come ahead of next week’s Mid-Autumn Festival and the week-long National Day holiday at the start of October when pork consumption would normally be expected to rise. December’s winter solstice and January's Lunar New Year are also peak seasons due to holiday festival feasts.

China halted widespread limits on food purchases in the 1980s, with only one reported limit placed on pork purchases in the port city of Xiamen in 2011, although it is not uncommon for the government to release frozen reserves to drive down the market prices.

“[The purchase limitation] shows the government pork reserves are not very large … both the government and the market have a lack of [pork] supply, that is why the price is so high now,” Feng from Soozhu.com added.

Additional reporting by Laura Zhou