China could see a slide in pork production this year, according to industry analysts at The Netherlands-based financial services group Rabobank.
Losses in production from the outbreak in African swine fever in China are expected to be between 25% and 35%, Rabobank has forecast.
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The outbreak was discovered last August and has hit every province in mainland China.
“With ASF now affecting an estimated 150-200m pigs, the expected 30% loss in pork production is nearly 30% larger than annual US pork production and equivalent to Europe’s annual pork supply,” Rabobank said in a statement.
With China’s pork production potentially being cut by a third, global supply is expected to flow towards China, although Rabobank suggested there will still be a shortfall in supply to the market.
“These losses cannot easily be replaced by other proteins (chicken, duck, seafood, beef, and sheepmeat), nor will larger imports be able to fully offset the loss.We believe this will result in a net supply gap of almost 10m metric tons in the total 2019 animal protein supply.”
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By GlobalDataThe analysts said there could be opportunities for exporters to target China, notwithstanding the presence of ASF in other markets, as well as the restrictions on some countries in the form of tariffs or bans linked to food safety.
“Animal protein companies with an exportable surplus and access to markets in China and south-east Asia stand to benefit from the impacts of ASF. The EU, the US, and Brazil appear best placed to respond to increased import demand for pork and other animal proteins into China and south-east Asia.
“ASF has entered Europe: the disease is endemic in parts of Eastern Europe, such as the Baltic States and parts of Poland, and Russia. ASF outbreaks have been recorded in a number of other countries, including, notably, Belgium in September 2018. The potential for outbreaks to restrict exports from significant pork-producing countries, such as Germany, cannot be ruled out. Such restrictions would complicate the trade response to ASF in China and south-east Asia.
“The US is a major pork producer and exporter, yet the current tariffs on US pork exports to China are restricting current trade. Further, the US is a major poultry producer and exporter, but cannot export to China due to a ban associated with avian influenza imposed in 2015. If the trade tension that underlies these barriers does not ease soon, it could also complicate the global trade response to ASF.”
