The Agriculture and Horticulture Development Board (ADHB) has released a roundup of how the coronavirus outbreak is impacting the agriculture market in China and how this further affects the pork industry in Europe.
With some businesses in China returning to work from 10 February, AHDB analyst Bethan Wilkins reported that: “the recent increase in cases and deaths from the virus are likely to hamper their performance. China is very disease conscious, so even if businesses are operating, consumers will still avoid public contact and social occasions where possible.”
She noted that the ongoing impacts for China include: high levels of frozen food stacks following a lack of expected depletion after many Chinese New Year celebrations were cancelled; temporary suspensions of imports; a sever decline in people eating out at restaurants; an increase in online food shopping that retailers are struggling to cope with; and significant disruption in the supply chain.
Pork and dairy consumption are being impacted by the closure of restaurants, although Wilkins reported that retail sales are only reported as showing marginal reductions.
Impact in Europe
China temporarily suspended pork trading during the first week of February, and the US hog futures market reacted negatively to the news. Trading has since re-started, however the coronavirus is compounding supply chain issues associated with African Swine Fever (ASF) and it is likely that further logistical problems will emerge going forward.
Ms Wilkins reported that it is also likely that it will now be more difficult for attempts at herd rebuilding to get underway. She said: “This could mean Chinese pork production declines by more than expected this year, generating an even larger supply gap, which may ultimately encourage imports.
“Some exporters also believe the coronavirus outbreak could increase demand for imported products longer term. Clearly, with the situation still developing, any possible impact is difficult to anticipate at this time.”