Will the surge in international food prices transmit to the domestic market?
Abstract: Since the second half of 2020, the international food (including grain, vegetable oil, sugar, milk and meat) price index has risen sharply, which triggers people’s worries about the corresponding rise of domestic prices. This paper finds that domestic food prices, especially grain prices, have little correlation with the international ones. The surge in international food prices has little impact on domestic grain prices, but it will push up domestic feed prices and raises the cost of breeding. Due to high profits of pig breeding, the increase in feed prices will not lead to a decreasing supply of pigs. The price of pork will maintain a downward trend after the Spring Festival. As profits on broiler breeding have turned negative and feed prices have risen, the price of chicken will be pushed up in the second quarter at the latest. Under current circumstances, the processing of corn fuel ethanol can be reduced properly to stabilize feed prices.

Full report: