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It was too late. By then, the disease had become viral, scattered for hundreds of kilometers in sick animals, contaminated food, and dirt and dust on the tires and clothing of trucks. Nine months later, the contagion spread across the country, crossed borders with Mongolia, Vietnam and Cambodia and strengthened the meat markets around the world.
While official estimates would count 1 million pigs slaughtered, slaughter data suggest that 100 times more will be removed from the Chinese herd of 440 million pigs in 2019, the Chinese pork's "year of the pig." The US Department of Agriculture forecast a decline of 134 million head in April, the equivalent of the total annual production of US hogs, and the worst recession since the beginning of the hog accounting. Chinese in the mid-1970s.
"This is an unprecedented situation," said Arlan Suderman, Chief Economist at INTL FCStone Inc., which has been badyzing commodity markets for nearly four decades. "This will have an impact on world food prices."
The African swine fever strain that is spreading in Asia is undeniably nasty and kills virtually all pigs it infects with a haemorrhagic disease reminiscent of the Ebola virus in humans. This is not known to sick people, however.
Damage to pigs is particularly critical for China, with a $ 128 billion hog industry and the world's third largest per capita consumption.
The hog herd in China could fall by 30%, said Juan R. Luciano, president and CEO of Archer-Daniels-Midland Co., one of the largest agricultural commodity traders.
"China will clearly have to import significant amounts of pork and possibly other meat and poultry to meet demand," Luciano told badysts at a conference call. Meat purchases in China could 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 21% higher than a year ago and have risen in the US and the EU after processors sent more of their products to China. The price of bacon in Spain jumped about 20% in March, while that of pork rose by 17% in Germany, according to Interporc, an industrial group based in Madrid.
"The potential of this phenomenon is huge," said Angus Gidley-Baird, commodity badyst at Rabobank in Sydney. "This is the biggest problem affecting the animal protein market this year and is likely to have a lasting effect for a number of years, which will displace markets and possibly affect geopolitical situations."
The gathering is extended to other meats. Beef exports from Australia to China increased by 67% in the first quarter. In Brazil, shares in meat packers such as JBS and Minerva have soared, optimistic about the optimism of sales to China.
Increasing imports of meat from China will lead to higher food costs, which will affect economies around the world. The magnitude of these training effects depends on how quickly one can stop the epidemic. 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".
Analysts, from Morgan Stanley to Citigroup, to the US Department of Agriculture, are not convinced that the disease is not spreading yet.
Pork is the largest component of the consumer price basket in China, and its influence on other meat prices means that a doubling of its prices in China would increase the country's inflation by 5, 4%, all things being equal, according to Citigroup, which forecasts an inflation rate of 2.6% for the country in 2019.
The Chinese government will likely treat any hog inflation as an extraordinary event, distinct from general cost increases, said Liu Ligang, chief economist for China at Citigroup. in Hong Kong. Nevertheless, if the rise in pork prices raises inflation above a 3% ceiling, it could prevent the People's Bank of China from taking strong measures to revive the economy.
"The more people tend to study in the field, the more they tend to be afraid," Liu said. "It's a shock of supply, not a shock of demand, which could be transitory, but it could be a shock of the year." Prolonged supply, given the severity of the disease. "
The epidemic could also have political repercussions. Xi Jinping may want to finalize trade talks with US President Donald Trump to facilitate the importation of essential products for pork, poultry and beef, and allow Chinese lawmakers to focus solely on the fight against outbreaks, said Suderman of INTL FCStone.
The contagion also underscores the urgent need to invest the government in preparing for the outbreak, said Amanda Glbadman, head of operations at the Center for Global Development.
African swine fever in China shows that "surveillance systems for animal and human diseases are not working as well as they should," she said. "This should concern everyone as the potential economic impact of large-scale outbreaks is enormous."
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This article was written by Dan Murtaugh and Enda Curran, Bloomberg reporters.
Jason Gale of Bloomberg, Irene García Pérez and Hannah Dormido also contributed.
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