China suspends internal pork transportation in 18 provinces


The lockdown is affecting the domestic market and analysts are expecting a supply gap of 2 to 3 million tonnes in the following months.

Posted on Sep 21 ,12:10

China suspends internal pork transportation in 18 provinces

Pig and pig meat transportation has been banned in 11 provinces adjacent to the 7 provinces where the African swine fever epidemic occurred, announced the Ministry of Agriculture in China. By now there are 20 cases of African Swine Fever (ASF) in seven provinces and the scenario is looking darker day after day.
"These growing and more frequent reports are affecting producer’s actions and also market conditions. We are being told that many farms are locking down and not allowing their people out nor outside people in. Bio-security has long been a challenge in China and now owners and managers are taking unprecedented steps to protect their facilities from contracting this devastating disease.

Who knows how long farm workers will be content under these lockdown conditions, but many farms are now providing housing, cafeteria, laundry and even barbershop services for their workers. Many farms are becoming almost like small communities with all the comforts of home and even recreational facilities. So they may be able to withstand these conditions for some time.

However, local markets are reported to be very volatile as no pigs can ship to a naive province from any of the provinces infected with ASF. Nor can pigs be transported from the province of the neighbour of the infected province. That had caused a big variance on hog price from the province to province", reports Lyle Jones, Director of Sales in China, Genesus Inc.

Supply and demand within each province are affecting market hog prices. Those provinces within restricted zones may experience shortages of pork and increasing prices in the marketplace and the first effects are expected to be seen in the large cities of China.

As live markets in the are also blocked, small farmers will suffer the most, despite the fact that the prices are rising. "We would expect pork prices to increase from countries free of ASF while filling the void that likely will occur from demand in China and other Asian countries", added Lyle Jones.

No one can tell right now how this story will end for the world's pork largest producer as other cases are expected due to the fast spreading of the virus. "It is unlikely that this disease has been contained, and additional cases are expected to be reported. To contain the spread of the virus, China has restricted the movement of live animals within the seven provinces with ASF cases, as well as the eleven neighbouring provinces.

While the long-term repercussions are unclear, what we know today is that the curb on the transport of animals within China has created significant dislocations in animal and/or pork supplies. Surplus pork is weighing on markets as producers rush to market healthy stock. At the same time, prices in urban centres, along with regions in eastern and southern China, without readily available production have seen as much as a 40% increase in prices since transport bans were implemented", explains Christine McCracken, Senior-Analyst, Animal Protein at Rabobank.
Using the blue ear disease (PRRS) outbreak in 2007, as a reference, McCracken believes that "a supply gap of as much as 2m to 3m tonnes could emerge in the coming months".
Uncertainties are present also in EU, one of the major suppliers of pork for China, where ASF outbreaks have been confirmed in the Eastern European countries and some other cases were reported at wild boar population in Belgium, near the borders with France and Germany.
In fact, Western European countries are providing 35% of the global pork exports and the other important players that are not affected at this point buy the disease are few in numbers: the US, Canada and Brazil.
"By early 2019, we expect markets to have a better understanding of the outbreak and resulting import needs. If the virus spreads in Europe via the feral pig population, we believe there could be significant export demand for US, Canadian, and Brazilian pork, as well as sizable demand for competing proteins (beef, chicken, and seafood).

The potential spread of the disease throughout Asia and/or Europe also poses a great risk to North American and South American producers. Efforts to find and close all potential methods of contamination are underway. We believe import-dependent nations will build stocks where possible and begin establishing ASF-free suppliers. This may work to the benefit of North American and South American pork exporters, as well as global poultry and beef suppliers. We believe China and affected parts of Europe will work to isolate and eliminate the source(s) of contamination. Nevertheless, efforts to rebuild secure supplies are likely to take months," says the analyst.
In her opinion, the Chinese consumer is expected to seek alternatives in other animal protein existing on the market, such as poultry, farmed whitefish, and even beef, as the prices for pork are expected to go higher and higher in the next period.

 NEWSLETTER - Stay informed with the latest news!


Similar articles


Australia’s live cattle exports up by 14%

Aussie’s cattle exports are up by 14% in the first four months of the year compared to the ...

Read more Read more

Perdue Farms aquires the largest organic beef producer in the US

Perdue Farms is to add Panorama Meats, the US largest producer of 100% grass-fed and grass-finish...

Read more Read more

Alternative meat to reach a market value of $140b in 10 years

Alternative meat is to capture 10% of the market value of meat products in the next decade, accor...

Read more Read more
Websolutions by Angular Software and SpiderClass