Sharply rising pork prices in China, caused by the impact of African swine fever, have threatened to turn inflation-adjusted bond yields in the country negative. Bondholders face returns of more than 2.5%, after factoring in inflation, compared to 2% in Korea and 0.2% in India. Domestic investors are suffering most as the Chinese government does not sell inflation-linked bonds to help boost returns. China’s National Bureau of Statistics said pork prices should return to normal. Subsidies and support for pig breeders has increased, but analysts have suggested a drop may be slow as inflation could continue rising.
Sharply rising pork prices in China, caused by the impact of African swine fever, have threatened to turn inflation-adjusted bond yields in the country negative. Bondholders face returns of 0.2%, after factoring in inflation, compared to 2% in Korea and more than 2.5% in India. Domestic investors are suffering most as the Chinese government does not sell inflation-linked bonds to help boost returns. China’s National Bureau of Statistics said pork prices should return to normal. Subsidies and support for pig breeders has increased, but analysts have suggested a drop may be slow as inflation could continue rising.