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ASF in China: Winners and losers from pig-killing disease

The arrival and rapid spread of African Swine Fever (ASF) in China, home to half the world pig herd, will have a noticeable effect on world markets both for meat and animal feed.

Friday 10 May 2019 (4 months 11 days ago)
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While the exact impacts are still to be determined, the disease could cause a near 20 percent decline in China's hog inventories. The sharp contraction is supported by indirect evidence, suggesting a large local contraction in the pigmeat processing industry as well as in pig feed production and sales.

The global impact is likely to be complex. On the one hand, pigmeat imports are projected to rise by as much as 26 percent. Imports of other meats, including bovine and poultry meats, are also expected to rise. On the other hand, fewer pigs in China should translate into lower demand for feed grains and oilseeds, in particular soybeans. China imports about two-thirds of all internationally-traded soybeans, and around half of these are destined for its domestic pig herds. Imports were already slowing due to trade tensions with the United States of America; they are further reinforced by the country's decision to reduce the protein requirements for pig feed.

At the same time, meat consumption in China is unlikely to grow as fast as in the past, with consumption levels of meat, farmed fish and eggs having already reached 95 kilograms per capita per year. On top of that, revisions made in the wake of China's latest agricultural census indicate that the country has more than 180 million tonnes of maize in storage, which adds to ample feed grain supplies and also appears to be lowering import demand for barley and sorghum.

While much depends on efforts to contain ASF - which has recently also been reported in Viet Nam, a major pig meat producer, and other neighboring countries - trends point to likely higher pigmeat prices and lower feed prices. This "rare combination of events" stands to benefit the farm sector in Europe, which will benefit from lower feed prices, as well as pork producers in the U.S. where export capacities are in place to increase supply swiftly.

At the same time, the ASF crisis is a boon for those who raise chickens, particularly major exporting countries such as Brazil. Importantly, poultry production in China is expected to grow by 7 percent this year, reflecting the impacts of ASF and also the country's successful containment of another fast-spreading animal disease, Highly Pathogenic Avian Influenza.

Thursday may 9, 2019/ FAO.
http://www.fao.org

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