Global pork production to fall by 4% on the back of China ASF woes

Lower productivity in China will result in a 4% reduction in global pork production in 2019, according to the latest outlook report from the United States Department of Agriculture.

The USDA is forecasting a 10% drop in Chinese output due to the African Swine Fever (ASF) outbreak which has resulted in a decline in breeding stock, leading to a contraction in pork production.

AHDB analyst Felicity Rusk said: “The latest figures contrast with the forecasts from October, which still anticipated a 1% rise in Chinese production. This highlights how the ASF situation has escalated in recent months. Nonetheless, the decline is still at the lower end of recent estimates made by other analysts.”

The USDA estimate of the impact of ASF in China is relatively conservative. A recent report from Rabobank, for example, suggested Chinese production could fall 25-30% year-on-year.

Whatever the actual figure, EU pig producers look set to benefit from increased Chinese import demand.

Ms Rusk added: “With Chinese production suffering, attention is turning elsewhere to supply the growing demand. Excluding China, production is projected to rise moderately, driven by the US and Brazil. Chinese imports are expected to increase by 41%, boosting global pork exports by 8%.

“The EU, in particular, look to benefit from the growing demand from China, with exports estimated to rise by 11%. The strengthening export market may encourage producers to expand their herds again later this year.”

US exports are also expected to benefit. Export sales to China are already increasing despite retaliatory tariffs in place. While these tariffs remain a deterrent, US pork may benefit indirectly from shifts in trade flows.

Strong demand is also anticipated from Japan. Tariff reductions on red meat as part of new free trade agreements will stimulate demand for EU and Canadian pork.  However, exports to Korea will likely reduce due to increased domestic production and high stock levels.