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Regarding the impact of the outbreak of African swine fever (ASF) in China on the global and EU meat markets, two options are considered:
- a faster recovery where pigmeat production in China outgrows pre-ASF levels in 2030 and
- a slower recovery where pigmeat production in China in 2030 is below pre-ASF levels.
For both scenarios, Chinese import demand will reach record levels, leading to higher exports from key exporters, including the EU. This will also lead to a production expansion outside China in the next two to three years. However, in the EU, production increase will be limited by environmental policy requirements in most EU member states.
The pigmeat outlook is particularly uncertain this year given the severe impact of ASF on the supply of several Asian countries, particularly China
By the end of 2020, Chinese production is expected to fall by more than 35% compared to 2018. The resulting supply gap would more than double the world import demand of 2018, and represent more than 80% of the EU pigmeat production. Therefore, the gap can only be partially covered by imports, which will significantly rise, as high prices in China should make producers in exporting countries divert products normally consumed locally. Chinese pigmeat production will only begin to recover from 2021, if the disease is contained, and could be stabilised by 2025 if the restructuring of its pigmeat industry is successfuland rapid.
EU pigmeat production is limited by public policy choices stemming in particular from environmental concerns in several EU Member States (e.g. Germany and the Netherlands), and by the ASF risk in central and eastern Europe. However, the current surge in world demand and prices will allow for growth in other countries, particularly those with access to Asian markets (e.g. Spain). Once Chinese production begins to recover, EU production and prices should decline significantly. By the end of the outlook period, EU production is expected to fall to pre-2018 levels, as some consumers will not return from poultry to pigmeat consumption.
EU pigmeat exports have already risen significantly in 2019, driven by Chinese demand. Shipments should remain high over the outlook period, peaking around 2022, and falling as Chinese supply recovers. However, EU exports are expected to remain higher than todayby 2030, as other trade partners may not have managed to recover completely from ASF. Major uncertainties for the outlook period are the level of Chinese demand by then, and if ASF will be kept out of the main EU export countries. EU pigmeat imports should remain very low.
Pigmeat consumption per capita is already declining in some EU Member States, as consumers tend to favour poultry, which is cheaper and perceived as a healthier choice. The high prices in the first years of the outlook period should accelerate this trend. As a result, pigmeat consumption may fall to 30.2 kg per capita, compared to an average of 32.3kg in 2015-2018.
EU pigmeat prices are already rising in 2019 following Chinese demand, and should still rise in 2020. Prices should remain high until Chinese production recovers, and may fall sharply depending on the speed of the recovery and how much the production of EU competitors (the US, Brazil and Canada) grows. Once the situation stabilises, EU prices should remain at around EUR1500/t by the end of the outlook period.
Tuesday December 10, 2019/ DG Agri/ European Union.
https://ec.europa.eu
