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Zhongpin Expects the Trend of Hog Prices to Remain Steady in the Near Future

November 22, 2010

CHANGGE and BEIJING, China, Nov. 22, 2010 /PRNewswire-Asia-FirstCall/ — Zhongpin Inc. (“Zhongpin”, Nasdaq: HOGS), a leading meat and food processing company in the People’s Republic of China, today commented on the outlook for hog and pork prices in China, given the recent measures issued by China’s State Council.

Mr. Xianfu Zhu, Chairman and Chief Executive Officer of Zhongpin Inc., said, “We noticed that China’s State Council issued 16 measures to stabilize consumer prices and to ensure market supplies. Excluding direct price intervention items, the 16 measures (listed below) focus on production development, stabilization of supply, reduction of delivery costs, standardization of market order, and enhancement of market supervision.”

Since early October 2010, hog prices have maintained a slight rise and in that period have hit a high for the year to date. Pork prices have generally also risen during this fourth quarter of 2010.

Looking at the hog breeding sector, during the second half of 2010 the hog breeding industry in China is now profitable. Rising hog prices further increases breeders’ profits and encourages farmers to replenish hog stocks. Currently in the hog market, supply and demand are essentially in balance. Therefore, the trend for hog prices is expected to be steady by the end of this year.

Mr. Zhu continued, “China’s pork market is market-oriented and heavily influenced by demand and supply, so the Chinese government generally adjusts the market by implementing policy using its frozen pork reserve instead of imposing direct price intervention measures. As a pork reserve participant, Zhongpin should benefit from changes in China’s frozen pork reserve.”

Background information

Below is related information released by the Xinhua news agency, Beijing branch, on November 20, 2010.

The State Council announced 16 measures to stabilize prices, and government will issue temporary subsidies prices

“The State Council has released a notice ordering local governments and related ministerial agencies to take 16 measures to stabilize commodity prices. The measures include increasing the supply of agricultural products, reducing the logistics costs of agricultural products, ensuring chemical-fertilizer supply, coordinating the supply of coal, power, oil and natural gas, offering price subsidies to low-income families, and developing a mechanism to adjust social security payments for inflation.

“Local governments and departments must boost production and ensure supply while checking irrational demand and punishing illegal activities that push prices up.

“From December 1, road-toll stations are forbidden to collect fees from vehicles transporting fresh agricultural products, including vegetables, fruits, aquatic products, meat, eggs, and milk. Potatoes, sweet potatoes, fresh corn, and fresh peanuts are new items added to the free-from-road-toll list, as the notice said.

“Hereby notified as follows:

“First, boost agricultural production.

“Second, stabilize supply of agricultural products.

“Third, reduce the delivery cost of agricultural products.

“Fourth, ensure supply of fertilizers.

“Fifth, coordinate coal, power, and oil and gas supplies.

“Sixth, disburse temporary price subsidies.

“Seventh, establish coordinated social-security mechanism linked with price rises.

“Eighth, continue to implement the provisions for standardizing charges.

“Ninth, actively and steadily push forward price reform.

“Tenth, standardize management and processing of agricultural products.

“Eleventh, intensify supervision on futures and electronic transaction market of agricultural products.

“Twelfth, improve laws and regulations for price supervision.

“Thirteenth, strengthen price supervision and inspection and anti-price monopoly law enforcement.

“Fourteenth, enhance price information release system.

“Fifteenth, hold provincial governors accountable for the prices of ‘rice bags’ and make mayors responsible for ‘vegetable baskets.’

“Sixteenth, establish inter-ministerial joint conference system for market price control.”

About Zhongpin

Zhongpin Inc. is a meat and food processing company that specializes in pork and pork products, vegetables, and fruits in China. Its distribution network in China covers 20 provinces plus Beijing, Shanghai, Tianjin, and Chongqing and includes more than 3,285 retail outlets. Zhongpin’s export markets include the European Union, Russia, Hong Kong, South Africa, and Southeast Asia. For more information about Zhongpin, please visit Zhongpin’s website at http://www.zpfood.com.

Safe harbor statement

Certain statements in this news release are forward-looking statements made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Zhongpin has based its forward-looking statements largely on its current expectations and projections about future events and trends that it believes may affect its business strategy, results of operations, financial condition, and financing needs.

These projections involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements, which may include but are not limited to such factors as downturns in the Chinese economy, unanticipated changes in product demand, interruptions in the supply of live pigs and or raw pork, poor performance of the retail distribution network, delivery delays, freezer facility malfunctions, Zhongpin’s ability to build and commence new production facilities according to intended timelines, the ability to prepare Zhongpin for growth, the ability to predict Zhongpin’s future financial performance and financing ability, changes in regulations, and other information detailed in Zhongpin’s filings with the United States Securities and Exchange Commission. These filings are available from www.sec.gov or from Zhongpin’s website at www.zpfood.com.

You are urged to consider these factors carefully in evaluating Zhongpin’s forward-looking statements and are cautioned not to place undue reliance on those forward-looking statements, which are qualified in their entirety by this cautionary statement. All information provided in this news release is as of the date of this release. Zhongpin does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required by law.


    For more information, please contact:

    Zhongpin Inc.
    Mr. Sterling Song (English and Chinese)
    Investor Relations Manager
    Telephone +86 10 8286 1788 extension 101 in Beijing
    ir@zhongpin.com
    Mr. Warren (Feng) Wang (English and Chinese)
    Chief Financial Officer
    Telephone +86 10 8286 1788 extension 104 in Beijing
    warren.wang@zhongpin.com

    Christensen
    Mr. Han Fang (English and Chinese)
    Telephone +86 10 5971 2001 in Beijing
    fhan@christensenir.com
    Mr. Tom Myers (English)
    Mobile +86 139 1141 3520 in Beijing
    tmyers@christensenir.com
    Ms. Kathy Li (English and Chinese)
    Telephone +1 212 618 1978
    kli@christensenir.com

SOURCE Zhongpin Inc.


Source: newswire