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UPDATE 1-China July pork prices surge on tight supplies, demand recovery

(Updates with background)

Aug 10 (Reuters) - China's pork prices surged in July on an annual and monthly basis due to tight supplies and a recovery in demand, the statistics bureau said.

Pork prices rose 20.2% year-on-year, the National Bureau of Statistics (NBS) said on Wednesday as it released inflation data, while on a monthly basis prices were up 25.6% from June.

The monthly gains in prices were attributed to production capacity cuts, farmers holding back pigs from the market and a recovery in consumer demand.

China's pig herd had been contracting in the past year as falling margins pushed some farmers to exit the market or reduce the number of their sows to curb heavy losses.

Last month, China's state planner urged top hog breeders to ensure steady supplies after prices surged.

Hog prices in China, the world's top pork consumer, have been rising since the start of the year, though have eased off peaks in July.

In Henan, China's top pig-producing province, hog prices <JCI-HOG-LUOHE> rose as much as 48% this year to 24.50 yuan ($3.63) per kilogram in early July, their highest levels since April 2021, and were last at 20.80 yuan per kg on Tuesday.

Pork is the most widely eaten meat in China, and it is a key component in the country's consumer price index.

Broader consumer inflation picked up to 2.7% in July from a year earlier, the fastest pace since July 2020 but missing forecasts for a 2.9% gain.

($1 = 6.7568 Chinese yuan renminbi) (Reporting by Emily Chow; Editing by Tom Hogue and Kim Coghill)

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