Pork prices continue to soar in China adding to worries for the country's leadership, which is already grappling with declining exports and sluggish economic growth as the trade war with the US takes its toll.
The price of pork, the most popular meat in China, jumped by 69.3 per cent compared with September last year, the National Bureau of Statistics said on Tuesday, after African swine fever forced farmers to cull livestock.
The outbreak of swine fever has cut China's pig population by 39 per cent.
The rapid rise in pork prices, which outstripped many analysts' expectations, pushed up China's consumer price index by 3 per cent year on year in September, the largest increase since November 2013. Economists polled by Reuters had estimated a 2.9 per cent increase in consumer prices for the month.
Fear of the prospect of unhappy consumers, which has already led to rationing and price controls in at least one Chinese city, is just one of a handful of domestic challenges faced by Chinese president Xi Jinping.
Chinese exports fell 3.2 per cent year on year in September as the impact of the trade dispute deepened. Economists believe gross domestic product growth for the third quarter of the year, to be announced on Friday, could fall below 6 per cent, the slowest rate of growth in more than 30 years.
Economists expect that Mr Xi's pork problems, which are threatening the reputation of China's ruling Communist party, will only grow over the coming months.
"Given the spread of African swine fever, the sharp contraction of hog stocks, declining pork production and as there is limited scope to increase hog and pork supply, we maintain our view that pork prices will likely continue to trend higher in coming quarters," Ting Lu, chief China economist at Nomura, said in a note on Tuesday.
Data from the National Bureau of Statistics on Tuesday also indicated producer prices fell 1.2 per cent year on year in September, the largest drop since July 2017.
Beijing and Washington reached a limited deal in trade talks on Friday, the first good news from the discussions in several months. However, a more expansive trade deal between the world's two largest economies is still far from certain, and economists say the future for China's manufacturers is unclear.
"While the US and China agreed to suspend October tariffs and have said they expect to reach phase one of a trade deal around the November APEC [Asia-Pacific Economic Cooperation] meeting, we believe there remains ambiguity on the path forward," Morgan Stanley analysts said in a note to investors on Tuesday.
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