Panic in China as ASF takes its toll

Most Chinese pig farms are not restocking their herds as African swine fever (ASF) continues to spread across the country, according to reports.

China’s Agriculture Ministry has said that more than 80% farms that have been hit are deciding not to restock. “There has never been such panic among farms,” Wang Junxun, deputy director at the Agriculture Ministry’s bureau of animal husbandry and veterinary services, said at a conference in Beijing over the weekend, according to a Bloomberg report.

Lack of bio-security measures at many of small farms, coupled with a large number of live hogs being transported long distances, are to blame for the spread of the disease, he said. "If confidence among breeders fails to recover, it will hurt consumers,” he added.

Pork supplies could start to tighten and prices will hit record levels in the second half of the year, before tightening further in 2020, he said. Pork acounts for more than 60% of meat consumption, and China's love for it is pressuring authorities to ensure there will be sufficient supplies, he added.

The latest figures from China’s agriculture ministry show the sow herd was 21% down on a year earlier in March, following a 19% year-on-year drop in February. The overall herd declined by 10.1% to 375.25m head year-on-year in the first quarter of 2019, with slaughterings down 5.1%.

The US Department of Agriculture is now forecasting a 10% drop in Chinese output in 2019 to 48.5m tonnes, in stark contrast to its October forecast of a 1% rise.

With China currently producing about half the world’s pigmeat, this, the USDA predicts, will cause a 4% drop in global pork production in 2019, despite increases in the US and Brazil. Its analysts predict that a 41% increase in Chinese import levels, to 2.2m tonnes, will prompt an 8% rise in overall global export trade.

Rabobank projecting a 25-35% year-on-year fall in Chinese pig production, with up to 200m pigs lost to infection, slaughter or producers going out of business. This equates to approximately three times the entire US pig population. There would not enough pork, or other proteins, in the world to fill the gap, Rabobank stresses. Its report estimates that China could be faced with a supply gap of about 10m metric tonnes in 2019.

While increasing imports could narrow the shortfall, global trade volume may not be enough to fill China’s supply gap, according to Zhu Zengyong, a researcher with the Chinese Academy of Agricultural Sciences at the Agricultural Information Institute.

Should China’s domestic pig supplies drop by 10%, the country would need to import more than 2 million tons of pork, Zhu said at the Beijing conference. The global annual pork trade of about 9 million tons is only the equivalent of about two months of Chinese consumption, according to the USDA.