Global pork stocks forecast to decline further as coronavirus delays China ASF recovery

Global pork supplies will decline further this year as coronavirus delays the process of restocking the Chinese pig herd, Rabobank has predicted.

In its latest global ASF update, the bank forecasts global pork supply will fall by up to 10% in 2020 after a record fall in stock levels last year, according to a new report from Rabobank.

Pork production in China declined by more 20% in 2019 as the nationwide ASF outbreak caused havoc within the world’s biggest producer and consumer of pork.

Coronavirus, which is currently disrupting pork shipments into China as parts of the country have been forced to shut-down, is now causing further volatility on top of ASF, which Rabobank says continues to have the biggest influence on supply levels globally.

Rabobank’s analysts forecast a further 15-20% decline in pork production in China this year, after pork imports to China increased by 67% in 2019, with Spain, Germany and the US the biggest exporters.

The report states that four issues will determine output levels for the sector in 2020.

Coronavirus will delay the restocking of pigs lost to last year’s ASF outbreak until the second half of 2020 to pick up as labour levels and the movement of livestock return to normal, Rabobabk predicts.

China’s food services businesses and retailers are also being hit as firms close their doors as a result of coronavirus, suppressing demand and leaving consumption levels difficult to forecast.

Another threat posed to pork supplies is the trade dispute between the US and China, despite its current truce. While this has so far led to an increase in US pork exports, its long-term evolution is much more unclear and is creating uncertainty in the wider market.

The third variable is the Chinese authorities’ management of domestic pork prices, which is further complicating the trade outlook. “If prices are kept at their current level we could see production growth stall and trade soften, while consumers benefit from more affordable pork. If authorities allow prices to rise, we will likely see more aggressive re-stocking from pork suppliers, but at a less affordable price,” the report states.

Finally, the ongoing threat of ASF spreading beyond Poland’s eastern borders and into Germany, Europe’s largest producer, is muddying the outlook throughout Europe.

Justin Sherrard, global strategist for animal protein at Rabobank, said: “We predicted last year that ASF would have an unprecedented impact on global meat supplies. Only now as the data filters through is the scale of the devastation clear.

“While the outlook for 2020 is slightly more upbeat, coronavirus is another match thrown into an already combustible mix. It makes for a four-pronged threat that will be keeping producers, traders and retailers awake at night. Stopping its spread remains the absolute priority.

“Many of the issues that initially impact Chinese producers will have wider-reaching effects on global supplies. Those in Europe, Southeast Asia and America will be monitoring further developments closely.”

Pig and pork prices reached record levels in 2019, dragging other meat prices up. Chinese imports of meat were above, or close to, record levels across all species.

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Editor of LBM titles Pig World and Farm Business and group editor of Agronomist and Arable Farmer. National Pig Association's webmaster. Previously political editor at Farmers Guardian for many years and also worked Farmers Weekly. Occasional farming media pundit. Brought up on a Leicestershire farm, now work from a shed in the garden in Oxfordshire. Big fan of Leicester City and Leicester Tigers. Occasional cricketer.