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Sources at the Ministry of Agriculture Wednesday issued a warning for the nation to brace for a consumer price index (CPI) hike as prices on pork and eggs remained high due to being in short supply and rising production costs.

Foodstuffs account for 33 percent of the CPI in China with meat, poultry and related products alone accounting for around 20 percent thereof

According to the Ministry of Agriculture, the price for live pigs in April stood 71.3 percent higher than a month earlier, with pork costing 29.3 percent more. Eggs also rose 30.9 percent in value on average.

In Beijing, the price of slaughtered pigs shot up by 30 percent in recent days, with egg prices rising to a five-year high.

Wholesale price of pork in Shanghai topped 16 yuan (US$2.1) a kilogram, a 20 percent hike to a 10-year high in less than a month. This price rose even further in Hangzhou.

The wholesale price was even higher in Hangzhou, capital city of east China's Zhejiang Province.

"I bought the pork at 17 yuan/kg from a distributor on Monday, but the price is fluctuating daily. I have been forced to up the retail price," complained Jin Qiuhua, a local retailer, at a pork stand in a marketplace of Maolang Lane, Hangzhou.

"I've sold pork for more than 20 years, and have not seen such a continuous price hike since 1994,"said Lu Youzhong, another pork retailer in the city.

As temperature soared, a blue ear disease epidemic has thinned the ranks of pigs in south China, leaving the northern provinces to fill up the deficit. 

"This sent a strong signal for distributors to jack up prices," said Xu Lianzhong, a senior economist with the National Development and Reform Commission's price supervision center, adding that a demand-and-supply imbalance has existed for a few years.

"Pig raisers have faced losses for the last couple of years and many have changed their business, leading to a decline in porcine stocks."

Price hikes on edible oil and grains also worsened the lot of pig farmers who were then hit by more expensive pig feed. Thus, the resultant price hikes in raising pigs and poultry were passed on to the customer when buying pork and eggs, explained Xu.

Grain prices, which are to be affected by an expected thrifty summer yield, will continue to rise slowly in coming weeks, maintaining the high prices on pork and eggs.

Xu predicted that egg prices would soon stabilize due to an easily-replenished supply but pork prices might take one to two months to be lowered, despite having hit a price ceiling.

 (Xinhua News Agency May 24, 2007)