Consumers in China feel the pinch as food prices rise

Consumers in China feel the pinch as food prices rise

Consumers in China are starting to feel the pinch as the country grapples with rising food prices, with factors such as bad weather and disease causing supply to dip. Fresh fruit prices, for instance, jumped 27 per cent in May compared to a year ago. Olivia Siong reports. 

BEIJING: At first glance, it’s a seemingly busy weekday morning for the fruit and vegetable shop that Mr Li Hongyan works at, located in a residential area in the Chinese capital.

But it is not business as usual.

Consumers in China are starting to feel the pinch as the country grapples with rising food prices, with factors such as bad weather and disease causing supply to dip.

Fruit shop worker Li Hongyan says prices of apples and pears have gone up the most this year
Fruit shop worker Li Hongyan says prices of apples and pears have gone up the most this year. (Photo: Olivia Siong)

Officials have sought to allay concerns, saying that it will step up monitoring as well as efforts to guarantee supply of necessities, such as fruits, vegetables and meat.

Fresh fruit prices jumped 27 per cent in May, compared to a year ago. Mr Lu said some customers avoided buying the more expensive fruits.

“This year, especially apples and pears, the price has gone up by a lot more compared to previous years," said Mr Li.

"The price has gone up because the supply is down.”

Fruit supply has been affected by severe weather in parts of China. Business has taken a hit, Mr Li added.

READ: China inflation hits highest level in 15 months

READ: More worry for China as industrial growth disappoints

Supermarket in Beijing selling pork
A supermarket in Beijing selling pork. (Photo: Olivia Siong) 

Mr Li said while the shop used to sell three cartons of apples a day, this has dropped to just one carton per day in recent months. Fruits aren’t the only items that have seen their prices go up.

Pork prices spiked by 18 per cent last month compared to the year before after the devastating African swine fever epidemic.

The protein is part of the everyday diet in China - used in numerous dishes ranging from dumplings to buns. China alone accounts for about half of the world’s pork consumption. 

But more than a million pigs have already been culled to contain the outbreak of swine fever and with a further drop in production expected, this could lead to pork prices rising by 70 per cent in the second half of the year, officials said.

The rising food prices are coming at a sensitive time for China’s leadership. Income growth is slowing, while unemployment is a growing concern, amid rising tensions with the United States.

“For the middle class and lower income class, eating pork is very important," said Dan Wang, an analyst at the Economist Intelligence Unit.

"The worst case scenario is we might see regional de-stabilisation in the market and people will get really grumpy over the fact that they can’t just consume as much as they want. 

"But the propaganda machine would also go to work trying to convert more people from being pork eaters to beef eaters since it’s supposedly more healthy. There might be a shift in diet as well." 

A meal in China
Pork is part of the everyday diet in China. (Photo: Olivia Siong) 
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Some consumers are already moving away from pork to other alternatives.

“Our business is definitely affected, how can it not be? Right now, pork is expensive, the people cannot afford it," lamented Mr Li Shan, who sells pork at a supermarket in the city. 

He added that many customers have turned to beef or mutton instead, pushing up prices of those alternatives as well. 

The World Bank says the concern is that rising food prices could have a knock-on impact, with China already grappling with a slowing economy.

"The impact is on those families that spend a large portion of their household income on food. Paying high prices for food will constrain expenditure on other goods and services and that could contribute to the weaker domestic demand," said Elitza Mileva, senior economist at the World Bank.

"So, this is something we are watching and I assume the authorities also worry about."

There may be an upside with a drop in the number of pigs being reared. The demand for soybeans, which is used in feed has fallen, allowing prices to remain stable for most of the year.

China has also expanded the amount of land used to grow soybeans in preparation for a protracted trade war with the US, after it slapped tariffs on imports.

Source: CNA/ad

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