SEOUL, May 13 (Korea Bizwire) – It is a general rule in economics that the supply of a good rises (or the demand for a good falls) the price tends to decline. When it comes to pork belly prices, however, the reverse holds true.
The number of hogs slaughtered recently is higher than usual, with a large drop in the demand in the wake of the ferry incident that has depressed the meat consumption. Still, the prices of pork belly are mysteriously at a record-high level.
According to the Ministry of Agriculture, Food, and Rural Affairs on May 11, the total number of pigs sent to the abattoirs in the month of April was 1,306,000, up 18.2 percent from the three-year April monthly average of 1,105,000.
Meanwhile, the average price of pork belly, the most preferred part by Koreans, during the month was 1,929 won per 100 grams, 16.2 percent higher than the three-year average of 1,661 won. In March, the price rise was 14.0 percent.
Due to the ferry sinking accident on April 16 that killed more than 300 passengers, the number of travelers has plummeted, meaning much fewer occasions for partying with soju and grilled pork belly.
Until very recently, the major cause of the pork belly price rise had been attributed to the fewer number of pigs slaughtered as the spread of porcine epidemic diarrhea (PED) virus. According to an agriculture ministry official, however, the impact of PED has been negligible and the pork supply has been higher than usual.
Livestock industry officials said the unusually high prices for pork belly were largely because of the hoarding by meat retailers and butcher’s shops in anticipation of a high demand in the summer months believing that the porcine epidemic diarrhea epidemic would continue.
As the retail meat sellers bought the inventory at such high prices, they are unable to easily lower the prices even in the face of a sudden glut.
Written by Sean Chung (email@example.com)