Irish pig farmers hope to benefit as ASF leaves global customers scrambling to secure long-term protein supplies

African swine fever in China has become a major world food markets event, with the Chinese loss in pork production now estimated at nearly 30%, larger than the US annual pork production, or equivalent to the EU’s annual pork supply.

With ASF now affecting an estimated 150-200 million pigs, the expected Chinese pork supply shortfall will create challenges and opportunities for global meat exporters, predicts Rabobank, one of the world’s leading food and agriculture lenders.

Rabobank’s experts expect Chinese pork production losses in 2019 of 25% to 35%, with sizeable breeding herd losses that will delay recovery of the world’s biggest pork industry for years.

Wholesale pork prices have climbed more than 9% since last July in China, which has the highest per capita pork consumption after Vietnam and the EU.

The disease has spread to Vietnam, where Rabobank predicts pork production losses to exceed 10%.

ASF has also entered Cambodia, and could move further into Southeast Asia.

Since its discovery in August, 2018, ASF has spread to every province in mainland China.

The pork losses cannot easily be replaced by other proteins such as chicken, duck, seafood, beef, dairy products, eggs, and sheepmeat, for China’s population of 1.4 billion.

Nor will larger imports be able to fully offset the loss, say Rabobank’s experts.

In 2020, the Chinese pork supply could be even tighter.

Rabobank expects available global protein supplies to be redirected to China, but says global protein customers are now scrambling to secure long-term protein supplies.

“This unprecedented shift in trade will likely create unexpected product shortfalls in markets previously served by these suppliers, creating short-term market volatility that will ultimately result in higher global protein prices,” said the bank’s market analysts.

A secular shift towards lower Chinese pork consumption will support increased demand for poultry, beef, seafood, and alternative proteins that will shape global production trends.

The EU, the US, and Brazil are thought to be best placed to respond to increased import demand for pork and other animal proteins into China and Southeast Asia, because they have exportable surpluses, and access to markets in China and Southeast Asia.

Irish pig farmers are among those hoping that Chinese demand will rescue them, after their significant financial losses due to low prices for over 14 months.

However, the potential for ASF outbreaks in Europe to restrict exports cannot be ruled out, with ASF endemic in parts of Eastern Europe, such as the Baltic States and parts of Poland, and Russia.

ASF was also confirmed in wild boars in Belgium last September.

Despite tariffs on US pork exports to China, part of a simmering trade war between the two global powers, China made its biggest-ever purchase of American pork in the week to April 4, pushing up Chicago hog futures.

But the US cannot currently export poultry to China, due to a ban associated with avian influenza, imposed in 2015.

In Canada, pig prices are reported to have jumped by more than 20% in Saskatchewan in the past few weeks, attributed to demand from China.

China replacing the US as New Zealand’s largest export market for beef is also attributed to the shock slump in the Chinese pork supply.

The annual World Pork Expo in Des Moines, Iowa, has been cancelled due to fears of African swine fever spreading.

Here, new posters at the Dublin, Cork, Shannon, Ireland West, and Kerry Airports warn people not to bring pork into Ireland, for fear of African swine fever spreading into Ireland, which has never had a case of the disease.

African swine fever is a severe, usually fatal viral disease of pigs and wild boar. It is caused by a virus first discovered in Kenya in 1921.

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