Friday, September 21, 2007

Strategic Pig Reserves (SPR)

Report: China releases pigs from reserves to help stabilize surging pork prices
Under a plan issued jointly by the Ministry of Finance and the Ministry of Commerce, China is releasing 30,000 tons of live pigs from its central reserves between Sep. 10 and Oct. 15, a person who saw the government notice told Dow Jones Newswires Friday.

"This move is more like a symbolic gesture on the government's part," said Peng Danxue, analyst at Everbright Securities.

China consumes 130,000 to 150,000 tons of pig a day, so 30,000 tons is "a drop in the bucket," Peng said.


From June:

Rise in China’s Pork Prices Signals End to Cheap Output
“People tend to underestimate the deflationary impact over the last 10 years” from Chinese exports, said Michael R. P. Smith, the chief executive of HSBC’s Asian operations. “It has got to the limit: you’ve had wage inflation, you’ve got rising natural resource prices. There’s just no more give.”

2 comments:

Anonymous said...

"China consumes 130,000 to 150,000 tons of pig a day, so 30,000 tons is 'a drop in the bucket,' Peng said."

Bet the bottom falls out of that bucket when they do the drop.

Stagflationary Mark said...

Is your prediction based on the sheer amount of pigs or the fact that the bucket is no doubt Made in China?

Either way I suspect you are right!