Social unrest in China due to high pig price?

The provincial government of Shandong, a province in northeastern China, monitors the number of pigs at regular intervals and the February count makes no difference. The number of pigs on the 1.100 selected large-scale pig farms in the province was 23,2% lower last month than in the same month last year. In addition, the pig herd was almost 20% lower than at the July count.

The number of breeding sows on 33 large-scale sow farms in Shandong was even 41,2% lower in February than in the previous 8 months. The enormous decline in the pig herd is striking, because only 1 outbreak of African swine fever has been officially reported in this area.

Many more outbreaks
The size of the pig herd is also monitored nationally and these counts also indicate that the number of pigs has fallen sharply. The number of outbreaks of African swine fever in China is officially at 114 and approximately 1 million pigs have been (preventively) culled. Friend and foe agree, however, that the actual number of outbreaks is much higher.

Chinese authorities, on the other hand, are reluctant to confirm the outbreaks because the government is offering compensation to affected producers. These amounts can amount to $180 per pig. 

Rapid increase in pig prices
The shrunken pig herd is putting a brake on supply to slaughterhouses, causing pig prices to rise particularly rapidly. In some regions of China, prices have risen by as much as 60% in a short time.

A pig farmer from Henan province reports in Chinese media that he sold 300 pigs in January for 300.000 Chinese Yuan (approximately €40.000) and that he sold 200 more pigs for the same price in February. Yet he is reluctant to increase production because of the enormous uncertainty.

consumer price index 
The pig price counts heavily in the Chinese consumer price index (CPI), which gives an indication of the household budget of an average Chinese. Several analysts expect inflation to be 3 percentage points higher at the end of the second quarter than now, which would bring the Chinese CPI index to the highest level since 2012.

A rapid increase in this index can lead to social unrest, because purchasing power will then be reduced. And that is the last thing President Xi Jinping's communist party wants; Perhaps that is why outbreaks of African swine fever are kept under wraps.