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Pigs may seem like an unlikely barometer of inflationary pressure, but in China, declining herds are a matter of concern amid fears that a sharp increase in pork sales could drive consumer prices higher next year.

 

Faced with sluggish domestic demand and the record cost of fattening animals — the result of a steep rise in the prices of corn and soybeans as drought grips the top exporter, the United States — Chinese hog producers are being forced to sell their herds.

 

China’s food price cycle is driven in large part by pork, the country’s staple meat. And while it is in abundance now, in about six months, meat stocks are expected to fall as a result of the sell-off, resulting in a surge in prices.