Emerging reports of African Swine Fever in China

A wide range of variables can affect protein supply and consumption around the world and the outbreak of disease is one that has potential to have a sudden and significant impact. In the last week, reports have emerged of new cases of African Swine Fever (ASF) discovered in locations across China. Despite this disease being limited to pigs, the ripple effect to any disruption in the supply of China’s principal protein has potential to affect demand for beef and sheepmeat. Important to note, it is still unclear how widespread and serious recent outbreaks of ASF in China are.

The OIE reports ASF is a highly infectious disease and no vaccine is currently available. In Russia and Eastern Europe, the virus is endemic in the wild boar population making eradication extremely difficult. Culling infected animals and imposing strict containment measures are the only tools available to limit further spread. The ability of Chinese authorities to quickly and effectively contain recent outbreaks will determine the impact on production and, following this, demand for imported pork or alternate proteins. The cases reported so far are significant distances apart, highlighting the challenge ahead for local authorities.

China has the world’s largest hog breeding herd, by a long way, and are massive consumers of pork, chewing through close to 54.7 million tonnes annually, in comparison to around 7.9 million tonnes of beef and 4.9 million tonnes of sheepmeat (FAO 2017 carcase weight equivalent estimates). If ASF spreads, leading to significant culling of animals to contain the disease, it could put a large dint in its domestic pork supply, pushing prices higher and driving consumers to seek out other sources of protein. Although ASF is not harmful to human health, amidst a backdrop of food scandals, there is potential Chinese consumers (who can afford to) may avoid domestically produced pork, opening the door to imported pork and alternate proteins.

The outbreak of ASF has occurred in the midst of an ongoing US-China trade dispute, with China slapping two rounds of retaliatory tariffs on US pork exports at a time of record US pork production. The trade and supply environment has weighed heavily on the US hog market however the announcement of fresh ASF outbreaks had an immediate impact on prices with a sharp upwards turnaround in US hog futures.

The global meat trade is watching how events unfold extremely closely, as any significant impact to pork production and consumption will create a ripple effect and the consequences of this will likely touch all major suppliers of all major proteins.