China launches a pork-price index to smooth the “pig cycle”

By THE DATA TEAM

PIG is big in China. As the country’s economy has grown, so too has its consumption of pork. The average Chinese person today pigs out on 40kg (88lbs) of pork a year, up from 12kg in 1980. Although China constitutes just one-fifth of the world’s population, it consumes half of its pork. Unfortunately for Chinese carnivores, however, the country has had trouble rearing enough pigs to meet growing demand. That has led to sharp price shocks.

China’s pork producers generally remain fragmented and inefficient. A fifth of the country’s domestic supply still comes from small-scale “backyard” farmers, who enter the market when prices suit them and exit just as abruptly. In recent years, such fluctuations in supply have contributed to large swings in prices, including spikes in 2008, 2011 and 2016. To smooth this boom-and-bust “pig cycle”, Chinese officials have used price controls, subsidies and even a “strategic pork reserve”.