June 24, 2011

Many countries have strategic oil reserves but China has strategic pork reserve for social stability

Pork plays a vital role in China’s commerce. There are almost half a billion pigs in China, one for every three people. In gross terms, like in humans, China dwarfs other countries in pigs. And there’s no India of pigs to rival China. The next biggest producer is the U.S., which has 65 million pigs, according to the United Nation’s Food and Agriculture Organization. In fact China produces more pigs than the next 43 pork producing countries combined. China is the biggest pork producer in the world—almost all of its 50 million metric tons of production in 2010 (half of all the pork in the world) was consumed domestically.

China has a frozen pork reserve, a series of icy warehouses around the country it set up a few years ago to stabilize pork prices.

Charts and information below are form the report Feeding China’s Pigs: Implications for the Environment, China’s Smallholder Farmers and Food Security By Mindi Schneider, Institute for Agriculture and Trade Policy, May 2011.



China's Strategic Pork Reserve and Social and Political Stability

Feeding China’s Pigs: Implications for the Environment, China’s Smallholder Farmers and Food Security By Mindi Schneider, Institute for Agriculture and Trade Policy, May 2011

What do pigs have to do with social and political stability in China? Plenty. In a country where most of the population spends a large share of their household income on food, and where pork is the staple protein source, when the price of pork rises, discontent is often not far behind. In an attempt to quell potential protest that could threaten state power, central authorities created a strategic pork reserve to control pork prices and to signal the need for shifts in policy. This is the only reserve of its kind in the world today.

The strategic pork reserve consists of two different parts. The Ministry of Commerce initiated a live hog reserve that started operating in earnest in 2007 when the inflation rate in China hit 6.5 percent, and the price of meat and poultry surged 49 percent from the previous year. The live hog reserve had been in existence before this price crisis, but was quite small and rather ineffective at regulating price. Today, it consists of a stock of a few million pigs that are rotated every four months on 200 to 300 commercial farms.

60 million pounds of pork were bought in 2007 for the frozen reserve. The specifics of how the strategic pork reserve operates are tightly held state secrets. According to a pork industry expert in China, COFCO has a monopoly on both the live hog reserve and frozen pork reserve. COFCO also has a minority share in Smithfield Foods, and in 2009, bought Smithfield out of its joint venture in Maverick Food




The FAO predicts that nearly twice as much meat will be produced in 2050 than in 2008, reaching a projected total of more than 465 million tons.

To increase meat consumption for 1.3 billion people on only 120 million hectares of arable land, something’s got to give. For China’s central authorities, a key “something” has been soybeans. China is the world leader in both soybean meal and oil production, but it is important to remember that this output comes overwhelmingly from imported beans.


Future meat Consumption in China and World

China’s rapidly growing meat demand: a domestic or an international challenge? (5 pages)

According to FAO statistics, in 1985 meat consumption in China was approximately 20 kg per person per year, by 2000 it had increased to 50 kg per person per year. China’s per capita meat consumption in 2030 will be at around 85 to 88 kg per person per year.

In the US in 2007, per capita consumption of red meat, poultry and fish (boneless
equivalent) was 200.4 pounds (90.9 kg).


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