In its latest update on the global African swine fever (ASF) situation, Rabobank said hog losses in China have reached critical levels, the rest of the world’s producers cannot make up the difference, and disruption will intensify as the disease continues to spread.
Rabobank said China’s pig herd loss is expected to reach 50% for 2019, leading to even lower pork production. The report said a 25% drop in pork production is expected in 2019, with a further 10% to 15% drop in 2020.
“We expect large-scale restocking in 2020, as pig population density declines sharply, along with the chance of disease infection,” the report said.
Live hog and pork meat prices in China have reached record highs. Prices in the south and southwest of the country have risen faster than in the north and northeast due to larger liquidation and the serious shortage.
While the supply gap created by lower pork production in China cannot be completely filled by other proteins, all other animal proteins have become substitutes for pork – mainly poultry, which is expected to see a 10% increase in production in 2019 that will continue into 2020. Brazil will continue to dominate poultry exports to China, while the EU and Thailand are growing, along with Russia.
In retail markets, the report said, pork and poultry prices have correlated, with poultry prices also increasing strongly. Prices of all meats are expected to rise in the coming months.
China’s pork imports have increased and are expected to continue rising throughout the second half of 2019. While Canada is the leading pork exporter to China, the European Union is a major source of China’s pork imports. However, caution among Europe’s pork producers could open the market for other pork exporters such as Brazil.
Vietnam and Europe
In Vietnam, pork production is expected to fall by as much as 20% in 2019, with the supply gap fulfilled by imports. However, per capita consumption is expected to fall 12% in 2019.
Pork prices are also rising in Vietnam, with price hikes expected to accelerate in the fourth quarter of this year.
Meanwhile, in Europe, there has been progress in Belgium in controlling the spread of ASF, but the virus continues to spread in central and eastern Europe. Romania especially has been challenged by ASF in domestic pigs, while outbreaks in many other places have been in wild boar.
Pig prices in many countries, including the Netherlands, Germany and Spain have hit their highest prices in five years and prices are expected to remain high.
View our continuing coverage of the African swine fever outbreak.
