As the price of pork skyrockets in China, Arlan Suderman, chief commodities economist at INTL FCStone, says pork is getting harder and harder to find at restaurants throughout the country. The potential for social unrest due to the pork shortage is a key reason why China is moving toward a trade deal, Suderman believes.
Restaurants are leaving pork on the menu, even though they don’t have it, leading to frustrated restaurant patrons. When the customer sits down to order, expecting to order pork, the restaurant then says they don’t have pork that day.
“The price of pork has basically doubled,” he says. “One of the ways we’re seeing prices ration demand is by restaurants unwilling to pay the higher price.”
Not only are consumers not able to find pork at restaurants, but they are also paying higher prices at the marketplace.
“They understand it’s because of ASF – that doesn’t create social unrest,” Suderman says. “The bigger concern is when people at the lower end of the income scale simply can’t find pork or can’t afford the pork and have to look for other options.”
Even if China uses all of the infrastructure available to them, they will not be able to import enough pork, Suderman says. The challenge is that as the price of pork increases, so do the prices of other proteins such as beef and poultry.
“When people can’t afford these high prices, they’ll move to a starch-based diet,” he says. “That’s what China wants to avoid, but I don’t think they’ll be able to.”
To follow the spread of ASF and learn more about the virus, visit porkbusiness.com/ASF.
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