The National Development and Reform Commission released a statement on 31st March claiming that the recent ratio of pork versus crop has dropped to 5:1, reaching first-tier warning level. In order to cope with this situation, the National Development and Reform Commission worked together with relevant parties to conduct the third round of state collection and reserve of frozen pork. It is estimated that this round of collection and reserve will claim 40000MT of frozen pork by 2nd or 3rd of April. If pork prices still consistently run at a low range, the central government will continue the work of state reserve in order to spur the rebound to a reasonable pork price range.
In terms of how this round of state reserve of pork will affect the market, according to the Ministry of Agriculture and Rural Affairs’ Chief Expert on pork industry, state reserve is the government’s macro-control measure on pork market. The quantity of state reserve of frozen pork is quite small compared to total pork market volume therefore can hardly inflict a significant impact on pork price. For example, the first and second round of state reserve claimed a total quantity of 78000MT of frozen pork, but the average monthly pork consumption in China is 4 million MT. In fact, as a national method to adjust the market, state reserve functions to lift market confidence and draw a positive picture of the future market.