A minor sidenote in the weekend news has been a rise in the price of pork in China. It is such a staple in the modern Chinese diet that its rise has pushed the inflation rate above 4%.
This would not be significant if the reports did not throw up some detail which relate even to the price of gasoline in the USA.
Pigs are a highly efficient way of converting human food waste into protein. That's why they play a part in a traditional subsistence farming setup, usually providing a source for a family to celebrate special occasions or simply to store over the winter. The tradition of smallholdings providing much of the family food, with surpluses sold off, has resulted in the number of pork dishes in Chinese cookery.
With increased wealth from commerce and industrialization, the society's diet tends to move "upmarket" with meat changing from being a possibly rare treat to being an everyday food. Demand rises above what can be met from a family raising its own food to mean that specialist farms raising larger numbers have to be set up. Much of rural China remains poor however so with the main wage earner often living away in the industrial "towns", raising the odd pig remains a way of making money from the family smallholding.
Recently however there have been two factors that are forcing up the price of pork. The first and the one most blamed in the reports is the rapid spread of a disease called "blue ear". This is a viral infection first identified in the USA where it is estimated to cost the industry $600 million a year. This report from Reuters quotes Albert Osterhaus of the Erasmus University Medical Centre in Rotterdam as relating the recent spread to the proximity of Chinese farms to each other.
While that report gives the official Chinese line that a million pigs have died, this report from the Financial Times yesterday gives a far greater proportion of the estimated 500 million pigs being kept:
"I have heard it has killed as many as 20m hogs," said an industry executive on Monday.
The government has not issued any estimate of how many pigs have been struck down by disease, and in any case, China’s size and the number of small producers make it difficult to quickly tabulate reliable figures.
But the impact of the shortage of pork is apparent in many areas, from sausage makers switching meats, to rising offal prices, and attempts by Hong Kong to import meat from South America.
Interestingly in the light of the recent melamine fiasco in the USA, the attempts to import from South America may fall foul China's "own health-related restrictions on imports from South America, where prices are relatively low" This is forcing the Government to open its strategic pork reserves to stabilise the prices.
The FT however does point to another reason for the increase in prices, one which will have long term impact.
While the price of feed, such as corn, has risen, the main culprit is an epidemic
With corn an internationally traded commodity, we have already seen the price of tortilla flour rise in Mexico to cause hardship in the poorer rural populations. Now we have further evidence that the effects are rippling out. As the Chinese demand has risen beyond the level at which the family scraps can maintain the livestock, they have moved on to commercial feeds. Those have to be transported and in China, despite the rail system, that involves road haulage. Rising world fuel prices mean increased costs in that transport.
In addition however, the move by Bush to use US farm corn production to convert to ethanol is restricting supplies of the grain for export. US production has been kept at near capacity so there has traditionally been a surplus of crops and little in the way of spare land. In China, smallholdings are increasingly being sold off and either inundated by large hydro projects like the Three Rivers Dams or swallowed by the rapid expansion of the industrial cities. These contrast with the older EU countries where the former surpluses were managed by taking land out of production by means of subsidies. These "set aside" fields cannot be used for food production however they can be used to grow crops suitable for biofuels.
Over the weekend, the UN expressed further concern over using arable land for growing fuel at a time when a billion people are food insecure. First in Mexico and now, apparently in China, we are starting to see how the move to ethanol in particular is affecting prices of staples worldwide. Surely another warning sign that this is another short sighted policy by Bush in an attempt to reassure Americans that they need do nothing about global warming.