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African swine fever

Global pork prices to soar on back of China ASF crisis

Alistair DriverBy Alistair DriverMay 14, 20192 Mins Read
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Global pork prices will soar over the next few years on the back of Asia’s ‘incredible crisis’ as African swine fever (ASF) takes a massive toll on pig production, according to analyst Richard Brown, director of Gira.

Mr Brown opened the Pigs Tomorrow conference in Leicestershire, on Tuesday, with an overview of the staggering implications of Asia’s ASF outbreaks. The virus is rampant in China and has spread beyond China to Vietnam, Cambodia and, in all likelihood, beyond.

He said the scale of the crisis was ‘bigger than BSE’ and the ‘biggest deal we have had to talk about’ in his distinguished career.

As the scale of the outbreak in China has become clearer, Gira has radically revised its projections and is now forecasting a 24% drop in Chinese production. This could amount to 13 million tonnes in 2019, more than total US pork production.

There will not be sufficient availability of pork or other proteins to fill this gap and as a result China, which has traditionally consumed around half the world’s pork, will have to change its consumption habits.

Nonetheless, there will be an ‘absolutely massive’ supply shock in world pork, with a surge in import demand from markets where there will not be sufficient volumes to meet the demand.

Mr Brown predicted that pork products will be diverted from markets right across the globe, including the EU, US, Canada and Brazil, to fill the gap. Other meats, including beef, chicken and lamb, will also be in demand.

This will lead to ‘much higher’ pig prices and an expansion in pig production – the EU stands to benefit as much as anywhere, he said – with other meat also set to increase in price because of demand transfer in markets starved of pork. Mr Brown suggested this is likely to be sustained for some time as ASF looks set to spread further within Asia, while China will struggle to contain the virus as it spreads across small backyard farms.

But he concluded with a warning. He expects China to eventually fill the gap – for example through the establishment of new massive pig production businesses.

Mr Brown predicted that by 2023, China could be back to something close to self-sufficiency, at which point import demand will drop. This would force down pig prices – and it could be a bloody time for producers, he warned.

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Alistair Driver

Editor Pig World, group editor Agronomist and Arable Farmer and Farm Contractor. National Pig Association webmaster. Former political editor at Farmers Guardian. Occasional media pundit. Brought up on a Leicestershire farm. Works from a shed in his Oxfordshire garden.

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