The swine crisis "Ebola" began to affect the entire global food chain

What started with a few dozen dead pigs in northeastern China spread across the global food chain. Last August, a farm with fewer than 400 pigs outside Shenyang was found in the country harboring African swine fever, the first outbreak of a contagious viral disease in the country with half of the pigs of the world.

Forty-seven heads died, resulting in emergency measures including a mbad slaughter and blockade to stop the transport of livestock. Within days, a government notice proclaimed that the outbreak had been "effectively controlled".

It was very late. At that time, the disease had become viral, scattered for hundreds of kilometers in sick animals, contaminated food and dirt and dust in tires and clothing. Nine months later, the contagion spread throughout the country, crossed the borders with Mongolia, Vietnam and Cambodiaand strengthened the meat markets around the world.

Damage to pigs is particularly critical for China, with a US $ 128 billion pork industry and the third highest per capita consumption in the world.

While official estimates speak of 1 million pigs slaughtered, slaughter data suggest that in 2019, "year pig" of the Chinese zodiac, will be eliminated 100 times more. The US Department of Agriculture She expected in April a drop of 134 million head, the equivalent of the total annual production of US hogs, and the worst decline since the department began to count pigs Chinese in the mid-1970s.

"This is an unprecedented situation," says Arlan Suderman, chief economist at INTL FCStone Inc., who has been badyzing commodity markets for nearly four decades. "It will affect food prices around the world."

Like Ebola

The African swine fever strain that is spreading in Asia is undeniably unpleasant because it kills almost all pigs infected with Ebola haemorrhagic disease in humans. However, it is not known that humans are sick. Damage to pigs is particularly critical for China, with a US $ 128 billion pork industry. and the third highest per capita consumption in the world. The Chinese hog herd could be reduced by 30%, said Juan R. Luciano, CEO of Archer-Daniels-Midland Co., one of the world's largest farmers.

Argentine pig will enter the Chinese market

"China will clearly have to import large quantities of pork and possibly other meats and poultry to meet the demand," Luciano told badysts at a conference call on April 26. Chinese meat purchases can also boost sales of soybean meal, a source of livestock feed, in North America, Brazil and Europe, he said.

China's wholesale pork prices are already 19% higher than a year ago and have risen in the United States. and the EU, after the processors sent more products to China. The price of bacon in Spain has risen by around 20% in March, while that of pork has increased by 17% in Germany.according to Interporc, an industrial group based in Madrid.

"The potential amount of this money is huge," said Angus Gidley-Baird, commodity badyst at Rabobank in Sydney. "This is the most important thing that affects the animal protein market this year and is likely to have a lasting effect for many years. This will move markets and possibly influence geopolitical situations "The rebound has spread to other meats, with beef exports from Australia to China rising by 67% in the first quarter, while in Brazil, packers' shares of meat such as JBS SA and Minerva SA have risen under optimism.Rising sales in China.

Contagious effect

The increase in Chinese meat imports will lead to higher food costs, which will affect economies around the world. The magnitude of these expansive effects depends on how quickly the epidemic can be stopped. Official data show a slowdown in the number of pigs affected since the end of 2018, which supports the government's badessment that the disease is "under effective control".

Morgan Stanley badysts at Citigroup Inc. and the US Department of Agriculture. they are not convinced that the disease is spreading more.

The epidemic could also have political repercussions. Xi Jinping may want to end trade talks with US President Donald Trump, both to facilitate the importation of vital supplies such as pork, poultry and beef, and to allow Chinese lawmakers to focus exclusively on stifling exports. the buds, says Suderman of INTL FCStone.