China: AVP in all corners of the world

African swine fever (ASF) was diagnosed in early August first officially established in China. Since then, more than 40 outbreaks have been confirmed by authorities. The outbreaks are not just limited to primitive backyard farms; Large pig farms have also been affected.  

3.000 kilometers away
In no time the virus spreads through the largest pig country in the world. For example, the first outbreak occurred in northeastern China, in the Liaoning province, which borders North Korea. Almost 3.000 kilometers away last weekend reported an outbreak in Yunnan province. This province borders the countries of Myanmar, Laos and Vietnam.

The series of outbreaks creates a lot of uncertainty. Experts of the Chinese pig sector believe that the number of outbreaks much higher than has been officially established to date. Pan Chenjun, market analyst at Rabobank, also has that thought. He says the virus has spread 'basically' throughout China. Some provinces have not yet officially reported outbreaks, but Chenjun says that does not mean they are actually ASF-free.

ASF has been prevalent in Eastern European countries since 2007. It took more than 10 years before the contagious animal disease became widespread. Western Europe (Belgium) emerged. The distance between Eastern and Western Europe is less than half the number of kilometers that the virus traveled through China in more than 3 months. This makes the outbreak wave in China all the more remarkable.

Major impact in South China
The recent outbreak in Yunnan (South China) is particularly causing a stir. This province borders Sichuan province, which is the country's most important production region. Nearly 70 million pigs are slaughtered there every year. Many pigs are also slaughtered in other surrounding southern provinces. A (relatively large) part of the supply comes from the north of China.

The transport movements this entails may explain why ASF has spread so quickly from north to south. Hygiene standards in China are much lower than, for example, in Western Europe. For example, pigs are ridden on mopeds and in open trucks transported across the country. The Chinese agriculture ministry is trying to stop the series of outbreaks with various transport bans, but so far this has been without success.

In addition, most pork is consumed in southern China. In Sichuan province, consumers eat an average of 68 kilos of pork per year. In northern China, the average consumption pattern is 'only' 20 kilos. A Dutch person eats an average of about 35 kilos of pork per year.

Skipped to Japan
Meanwhile, African swine fever has also been detected in Japan. A traveler from China was 'caught' with contaminated meat at a Japanese airport. This also happened recently in South Korea. The chance of ASF spreading through other countries in Asia is quite high. Pig farming is widely represented in Japan, South Korea and Vietnam.

The coming months will reveal where the nightmare (called African swine fever) ends. Then the question immediately arises whether the animal disease can be stopped at all. There is no vaccine. 

Nervous market
Pig prices in China are reacting nervously to the outbreaks, depending on the region. In general, the range is wide; Pig farmers send many pigs to slaughter to prevent a possible outbreak. The pig herd in China appears to be shrinking. Without giving exact numbers, the Chinese Ministry of Agriculture reported that the pig herd (September) has shrunk by 1,8% in one year.

The sow herd shrank by 4,8% in the same period. This decline has little to do with the outbreak of ASF, but is mainly a result of a persistent price decline in recent years. Due to the outbreaks of ASF, it is reasonable to expect that the shrinkage will continue (accelerated).

7% more imports?
Pork consumption in China has been growing for years. This trend is 'in principle' not in danger, as ASF is not dangerous to humans. However, there are indications that poultry meat is currently gaining popularity among Chinese consumers. Nevertheless, the increase in pork consumption is expected to continue.

In her forecast for 2019 the US Department of Agriculture (USDA) predicts consumption growth of 1% to 56,5 million tons in China. The import requirement is likely to increase by as much as 7% to 1,87 million tons. European exporters probably fill three quarters of this. In recent years, sales to China have actually fallen, causing European pig prices to drop sharply.

Can Europe benefit?
Of course, it is not said that the USDA's forecast is watertight. Due to the many ASF outbreaks, the Chinese pig sector lives day to day. However, if the USDA's expectations are broadly correct, the European pig sector can probably benefit from additional sales. And that will probably support pig prices in Europe, given the current levels is desperately needed. 

A (European) country must be ASF-free to ship pork to China. With the recent outbreak of ASF in Belgium still fresh in our minds, alertness and vigilance are required. AVP is currently less than 150 kilometers from the Netherlands. By Chinese standards, AVP could be in the Netherlands or Germany tomorrow.