Page 18 - Australian Pork Newspapaper

African swine fever remains the single most significant factor affecting the meat China’s retail pork prices have followed the same trajectory as hog prices so far in 2021, though may trend up sector in China in 2021. again in the coming weeks, depending on import volumes.
ASF continues to wreak havoc across Asia
AFRICAN swine fever remains the single most significant factor af- fecting the meat sector in China in 2021 – across production, imports and consumption – two and a half years after it first en- tered China in mid-2018.
around 55 million tonnes cwe.
may be under-reporting of ASF.
incentivised investment and have contributed to a recovery in the breeding herd, with total pig num- bers at the end of 2020 estimated to be 85 percent of the pre-ASF herd and pork production forecast to increase 5 percent in 2021.
through to prices.
The suggestion from sev-
China pork imports are forecast to be 8 percent lower year-over-year, largely due to recovering production, but are still expected to be elevated by historical standards.
throughout 2021.
Industry analysts GIRA
China has made signifi- cant investments in ASF vaccine development, but none has yet reached the stage of commercial de- velopment and numerous trial vaccines show mixed results.
Detection of the ASF variant has been reported in several provinces in China and Hong Kong and is estimated to have killed as many as eight million pigs since the start of the year.
Since breaking out across China, African swine fever has continued to spread and challenge communities in South East Asia, including Indo- nesia and the Philippines.
However, Vietnam also experienced numerous new cases in April 2021, which could act as a hand- brake to the recovery pro- cess if outbreaks continue.
However, piglet prices remain firm despite high feed costs, suggesting that piglet supplies remain limited and pointing to the potential for higher hog and pork prices in the second half of 2021.
Import demand for a range of meat categories – including beef and sheep meat – is expected to re- main high, further sup- ported by economic and foodservice recovery as the impact of COVID-19 continues to ease.
If these new facilities remain free of significant diseases, they are antici- pated to result in increased production flowing into the market from the fourth quarter of 2021.
Vietnam has also been investing in vaccine devel- opment and testing.
Several ASF outbreaks were reported in March, with the most recent case being April 5.
Retail and livestock prices in China remain historically high.
It is expected that the cycle of panic selling in response to outbreaks will continue to be reflected in price volatility during 2021.
For the year-to-February, pork imports were up 24 percent year-on-year, poultry was up 45 percent and beef imports rose 30 percent.
While China’s pork pro- duction recovery began at the end of 2020, it is expected to take several years due to the extensive loss of pig numbers.
A recent report from Reuters indicated that northern China had lost about 20 percent of its breeding herd in 2021 due to ASF, implying a 7-8 percent decline in China’s total breeding herd for the first quarter of 2021.
Given the busy trade relationships Australia maintains with many of these countries, the threat of ASF to the Australian pork industry remains.
China’s live hog and piglet prices have been trending down since February 2021, which is typical seasonal behav- iour post the Chinese New Year.
Beef and sheep meat re- tail prices reached highs in February 2021 during the peak consumption pe- riod around Chinese New Year but have eased some- what since then.
The impact of ASF on Chinese consumer diets has varied depending on socio-economic status.
Current forecasts suggest that China’s pork produc- tion could range between 45–55 million tonnes car- cass weight equivalent by 2025, possibly down on pre-ASF production levels at a five-year average
While the Ministry of Agriculture and Rural Affairs made announce- ments around a production recovery to boost industry and consumer confidence, indications suggest there
Since the first outbreak of ASF was confirmed in Vietnam in February 2019, it is estimated that six mil- lion pigs have been lost as a result of the virus, with pork imports increasing strongly in response.
This drop is often sus- tained until early-to-mid April.
Another challenge for industry recovery is the current high feed prices, driven by a combination of factors including a fall armyworm outbreak im- pacting domestic corn production, floods, ty- phoons and competition for grains from industrial useinCOVID-19sanitiser products and soybeans in bean-curd production.
While China’s produc- tion in 2021 is expected to remain sitting 25 percent below pre-ASF levels, it is nevertheless expected to lift 11 percent on last year’s production volumes.
Anecdotal evidence sug- gests that lower income consumers substituted pork with fish, eggs, poultry and soya-based products such as bean curd, while higher income consumers have increased consumption of a variety of proteins such as red meat, seafood and other premium products.
Emergence of a ASF virus mutation in Asia also complicates the sce- nario.
On a global scale, overall swine stocks were estimated at 753 million head at the start of 2021, a 15 percent lift relative to 2020 levels, but still a long way short of the 781 million head reported in 2018, prior to the outbreak of ASF in China.
eral analysts is that the re- cent softening of hog and pork prices could be an indication that producers have been selling off pigs to reduce their ASF ex- posure.
have confirmed that China has made significant ef- forts towards building around 40 new, large- scale, multi-story hog production facilities in southern and southwestern China, which aim to ramp up production and im- prove disease control.
High hog prices have
That said, live hog prices remain well above – around double – mid- 2019 levels when the im- pactofASFbegantoflow
China’s retail pork prices have followed the same trajectory as hog prices so far in 2021, though may trend up again in the coming weeks, depending on import volumes.
Hog inventories grew rapidly in 2020, however, ongoing ASF challenges relatedtothenewstrainof the virus will continue to constrain production.
GIRA have postulated that even after China’s pork industry fully re- covers, Chinese con- sumers will continue to eat less pork in favour of other proteins, with an- nual per capita consump- tion unlikely to revert to the pre-ASF peak in 2014 of 41.7kg per person.
Overall, pork prices are forecast to remain elevated relative to historical levels.
The European Union, the US, Canada and Brazil are expected to remain key pork suppliers to China
New dates for Alltech ONE Ideas Conference
ALLTECH’S commit- ment to delivering ad- vanced innovation and exceptional quality ex- tends to it’s world-class events, particularly the Alltech ONE Ideas Con- ference.
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It looks forward to
Page 18 – Australian Pork Newspaper, June 2021
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