A sharp 32 percent drop in pork prices in China since November 2022 increases the risk of deflation in the world’s second largest economy. This opinion was expressed by experts in an interview on the TV channel. CNBC.
The decline in the cost of pork, which figures heavily in China’s consumer basket, is currently reflected in a 0.5% annual decline in the consumer price index. This is the maximum decrease in the last three years, the publication writes.
This is due to overproduction of such meat due to weak domestic demand. China produced a record 55 million tonnes of pork in 2022. Additionally, hot weather in November slowed the traditional growth in smoked meat sales before Christmas.
After the outbreak of African swine fever in 2018-2021, farmers actively modernized their farms by taking out numerous loans. The agency states that there is now a surplus of meat on the market.
However, demand is currently low. Chinese people are turning to poultry, beef and other products for health reasons. Young people often try to reduce their consumption of pork.
Along with cheap pork, falling real estate prices and aggressive holiday sales by online retailers also increase the risk of deflation in China. Deflation may cause consumers to delay purchases in anticipation of further declines in prices.
Before this, Chinese officials approved Priorities for economic recovery
Previously to China guess a massive crisis that will cost regional banks trillions of yuan.