Pork price and CPI are highly associated in China.
China has gone through four "hog cycles" since 2006. Each cycle lasts about 3 to 4 years. For more than half of each cycle, price drops, because the keepers don't go out of the business as long as the business is still profitable, even though profit is thin.
There is at least one plague in each cycle that pushes price up. But during recent cycles, there are apparently some non-market forces that are affecting price, such as the government's environmental policies.
Upscale pig farming and technical advances have resulted in a reduction in the number of breeding sows and living pigs.
CPI rose in 2019 because pork price skyrocketed. Supply of pigs was insufficient due to the breakout of swine fever. At the same time, price of foods in replacement of pork surged as well. Pork price came back up as supply recovered and imports of American pork increased.
PPI measures changes in the price of all products from the producer. PPI is connected with international commodity prices and reflects the demand for industrial products. Price is likely to rise when demand grows. PPI has a positive correlation with investment and production.
PPI measures changes in the price of all products from the producer. Purchasing Price Index for Raw Materials, Fuel & Power (PPIRM) measures changes in the purchasing prices of raw materials, fuel and power.
When the spread between PPI and PPIRM widens, profit improves.
PPI measures changes in the price of all products from the producer. CPI measures changes in prices of consumer goods. Spread between the two indexes reflects the profitability of industrial enterprises. And they are highly correlated.
The CPI(A), CPI(B) and CPI(C) are compiled based on the expenditure patterns of households in the relatively low, medium and relatively high expenditure ranges respectively.
The CPI(A), CPI(B) and CPI(C) respectively cover some 50%, 30% and 10% of households in Hong Kong. The average monthly household expenditures (in HK$) of these groups in the base period (i.e. October 2014 - September 2015) were $5,500 - $24,499, $24,500 - $44,499 and $44,500 - $89,999 respectively.
*Excerpts from Census and Statistics Department of Hong Kong
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