China has few places to buy pork if fever disrupts production

Lydia Mulvany and Megan Durisin, Bloomberg

published

9:58 PDT, Wednesday, September 5, 2018

In China, a deadly swine virus strikes the world's largest consumer of pork if it does not need to increase its imports.

Until now, it is too early to say whether the outbreak of African swine fever – a highly contagious virus and eradicating pork – will have a significant impact on pork production in China, said Joe Schuele, wearing of the Meat Export Federation. .

Brett Stuart, a founding partner of Global AgriTrends, a market information firm, says it is disturbing to see a disease as deadly as another country has failed to fight.

Heather Jones, an analyst at Vertical Group, said that if the European Union, the world's largest exporter of pork, suffered massive losses, it could be the first to step in and fill the gaps. After that, there is the United States, but the Asian nation has imposed tariffs on American shipments. What could end up happening: China turns to the EU and other importing countries are starting to buy more US pork, she said.

US pork producer Hormel Foods said it was "watching the situation closely," while Smithfield Foods and Tyson Foods declined to comment.

Canada, Brazil and Chile will likely be the next to benefit from increased demand. In particular, Brazil has a strong pork export business, and its shipments to China more than tripled, said Stuart of Global AgriTrends.

"Brazil and China have given a lot of thought to the meat trade," he said.

China produced 53.4 million tons of pork in 2017 and imported about 1.62 million tons, according to data from the US Department of Agriculture.

Given that the country's pork imports represent only about 3% of its industry, production losses at the national level could weigh heavily on global supplies. For example, if the country lost 17% of its production, it would take all the pork traded in the world to offset that demand, said Stuart.