African Swine Fever: a global update
While African swine fever continues to devastate pig herds and production in China, the focus is now shifting to other parts of Asia, given recent outbreaks in the Philippines, South Korea, and Timor-Leste, according to the latest African Swine Fever Global Update by RaboResearch.
The spread of ASF in Asia, outside of China, has captured attention. “The impacts of African swine fever (ASF) across Asia are likely to be just as challenging as they have been in China, and we expect to see herd and production losses growing as we move into 2020,” says Justin Sherrard, global strategist – Animal Protein. “At the same time, price levels in China – for pigs and pork, as well as for other proteins – keep climbing, and China’s structural shortage of protein is becoming clearer.”
Record price levels in China signal how challenging the issue is going to be to resolve. High prices provide incentives for re-stocking, despite the risks of re-contamination by ASF. Yet, persistently high prices will create different challenges around pork trade, and around the production of other species and the import of those species, especially chicken. High prices also trigger market interventions by authorities – to maintain availability and affordability of animal protein. The research states that these are not the stable market conditions that will best support a structural response to ASF.
Trade is increasing, but is never going to be sufficient to solve the supply situation. Trade data, supported by market intelligence, shows that China’s pork imports are rising. Despite these increases – and RaboResearch’s expectation for further increases in pork flows to Asia – the region will be structurally short of pork in 2019 and 2020. Poultry will play a bigger role, as consumption shifts to other species and to plant-based proteins to fill the gap.
The global implications of what is happening are becoming clearer, but remain underestimated. “Growing pork exports and rising prices will challenge exporters in all regions to find an appropriate balance between increasing production, chasing high prices for exports, and supporting local customers,” according to Justin Sherrard. Rabobank anticipates relatively unstable market conditions over the coming three to five years, until biosecurity measures increase substantially, an ASF vaccine is widely available, export flows increase materially, and other protein supplies increase structurally.