Why is African swine fever changing the outlook for the international meat trade?

Guillermo D. Rueda / [email protected]

"Since its discovery in August 2018, the emergence of African swine fever (ASF) has spread to all provinces of mainland China in a rapid and destructive manner, thereby altering the prospects for international trade in the disease. meat."

This is the conclusion reached by Drs. Fernando Gil and Federico Santángelo, in the Agroideas Beef Chain Sector Report, development and agriculture projects.

China has the largest rodeo in the world, with 441 million heads representing 55% of the world's population. Although the magnitude of the decline in total stock in 2019 is uncertain, the USDA estimated in January Chinese hog inventories at 428.1 million head, or 3% less than the US. previous year, but expects the stock to drop to 350 million by the end of 2019, the lowest level since the 1980s.

Fernando Gil and Federico Santángelo, from the Agroideas Beef Chain Sector Report. / Photo: Lucas Chillemi

"PPA is a highly contagious disease that affects wild boar and pigs and is produced by a virus that causes bleeding, high fever and death within a few days, with a death rate of up to 100%," he said. Gil.

"The disease can be contracted directly by tick bites or by contaminated vehicles or clothing." "Control of access to livestock facilities and extreme cleaning of facilities and vehicles, including disinfection shoes, truck cages and reduced access to external services are essential to fight the disease, "Santángelo added.

"This is not a zoonotic disease." While official data on slaughter levels represent a fraction of China's total supply of pigs, unofficial reports from that country suggest much greater losses, "he said.

"The rapid and widespread geographic spread of epidemics, the extreme density of pork production and the lack of biosecurity on many farms can lead to a higher incidence of the disease," he said.

Gil also said that despite the recent downturn in outbreaks, the APP remains a problem and there is little indication that farmers have started repopulating their farms.

"The authorities have been trying to quickly clean up the quarantine areas and reduce the traffic restrictions that affected the markets last year," he said.

In this context, pork production is expected to decrease by 10% in 2019, in full liquidation of the breeding herd. At the same time, imports will increase by more than 2019 due to lower supplies and higher domestic pork prices.

Imports are expected to increase by 41% (to 2.2 million tonnes), just above the previous record of 2 181 M / T in 2016.

China has been steadily increasing imports over the past 10 years and is now the world's largest importer, accounting for about a quarter of international trade.

"Despite efforts to contain the disease, outbreaks continue to appear and more and more evidence is showing that China will not be able to eradicate PPP in the short term." Diseases, low profitability and high risks contribute to the large-scale closure of pig farms and discourage restocking by the remaining farms, "Santángelo explained.

Despite the increase in imports, consumption of pork will be reduced to a minimum in 10 years, due to the decrease in domestic supply and demand reduction.

"Many consumers have reduced or stopped pork for reasons of food safety, despite the lack of impact on human health." To appease consumers, businesses, schools and other interested institutions have announced that they would not serve pork, "said Gil.

Researchers say that as the supply of pork goes down, national prices for pork should start to increase and further reduce the demand for pork.

"Thus, we expect consumers to change the demand for other proteins, especially chicken and poultry meat, but also shellfish, lamb and beef" said Santángelo.

"These losses can not be fully offset by the increase in imports, nor easily replaced by other proteins (chicken meat, duck, shellfish, beef and mutton), resulting in a net deficit supply of nearly 10% .mt of total supply of animal protein in 2019, "he explained.

"PPP losses in Southeast Asia will exacerbate global protein deficiencies, which will increase the upward pressure on global markets, and the world's available protein reserves should be redirected to China in order to cope. increasing protein deficit, "he added.

"This unprecedented change in trade is likely to create an unexpected deficit of products in markets previously served by these suppliers, which would create short-term market volatility that ultimately would result in higher overall protein prices." said Gil.

The work concludes that the shift in global trade patterns to meet the demand for animal protein will be very dynamic, creating opportunities for companies with exportable surplus and access to China and Southeast Asia. Is.

"Animal protein companies with exportable surplus and access to markets in China and Southeast Asia will benefit from the effects of PPAs." The EU, the United States and the United States. Brazil seem to be better positioned to meet the growing demand for imports of pork protein and other animal protein in China and Southeast Asia, "said Santángelo.