Spotlight on ASF: Impact on Chinese pork production
Following last week’s article covering the current spread of African Swine Fever in China, in this article, we explore the potential drop in production that might stem from this.
Although ASF is yet to have a large effect on the size of the Chinese pig herd, expectations are that the disease will continue to spread in 2019. While disruption to live transport has already created gaps in the Chinese supply chain, further culling may also start to shrink the herd, limiting production and supply availability.
The extent to which culling might occur is of course highly uncertain, and depends partly on how Chinese government strategy evolves over the coming year. During the worst of the PRRS crisis a decade ago, GIRA estimates suggest the cull reached 30%, but the situation is unlikely to reach that level this time. The latest GIRA forecasts anticipate the cull rate could be closer to 6%. The industry has modernised in recent years, and the number of small backyard type farms with the weakest biosecurity has reduced significantly. Nonetheless, reports indicate that biosecurity remains a challenge for many units, with improper washing of vehicles, and a tendency to cover-up disease outbreaks rather than report them still fairly common.
With this in mind, GIRA forecasts a 4.6% decline in Chinese pork production over the coming year. This is between the low and mid-range scenarios proposed by Rabobank, which anticipate a 2-4% and 6-8% drop respectively. Some more extreme scenarios have also been proposed, with Rabobank also modelling a 10-15% decline, while the USDA have suggested production could remain similar to 2018 levels. As China produces over 50 million tonnes of pig meat a year, every 1% decline in production is equivalent to a 500,000 tonne shortfall. So, if production drops by around 5% this year, the supply gap would be in excess of 2.5 million tonnes.
In 2018, Chinese pig meat imports are estimated to have been around 2 million tonnes; so importing an additional 2.5 million tonnes would be a substantial increase. However, in reality, global supply availability and competition with other meats is likely to limit the level of trade. How much might global suppliers really supply to China? Find out more in next week’s article.
Bethan Wilkins, Analyst
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