China's pork rally set to ease as govt acts to rein in costs

Beijing

CHINA'S blistering rally in pork prices, which has pushed the country's inflation to the highest in seven years, may ease by the end of the year as the government takes a raft of measures to rein in run-away costs.

Besides more frequent sales from state reserves and moves to increase imports, China may also force commercial cold storage firms to release their inventories before the traditional Lunar New Year holidays in January, said Jim Huang, head of independent consulting firm www.china-data.com.cn. China is also prepared to lift a ban on US poultry to increase meat supplies. "We could see prices continuing to rise until the middle of December when the government may intervene," Mr Huang added.

The world's top pork consumer will boost imports from Canada after the recent resumption of trade, and allow shipments from more suppliers in Chile and Argentina, helping curb prices, said Zhu Zengyong, a researcher with the Chinese Academy of Agricultural Sciences' Agricultural Information Institute.

China's pork rally has already shown signs of slowing in the first week of November, with prices up 0.7 per cent from a week earlier, compared with a gain of 7.4 per cent in the last week of October and 11 per cent in the seven days before that. BLOOMBERG