African Swine Fever Drives Uncertainty in Global Pork Markets
The reports keep coming of African swine fever (ASF) outbreaks around the world. On March 3, local farms in Chita, Russia, revealed pigs with ASF symptoms, Reuters reports. Containment measures went into effect the following day. Buildings and stock feed were demolished, and disinfection began immediately.
ASF mutant strains in China continue to cause new outbreaks, diminishing the country’s ability to produce enough pork to meet its domestic demand while rebuilding its sow herd.
German pig prices held firm this week as strong sales inside Europe helped markets to recover from import bans on German pork imposed by Asian buyers, including China, Reuters reports. Although a number of countries have recently relaxed import bans on German pork, the import ban by China will likely remain in place for the first half of 2021 at a minimum, Rabobank reports in its latest global ASF update.
The uncertainty is significant when it comes to the 2021 pork outlook. Rabobank believes pig supply will generally increase in 2021 but expects prices to fluctuate due to these uncertainties of disease development, restocking interests, feed costs and import policies.
“Our view is that average hog prices in 2021 will be lower than in 2020 and subject to strong ups and downs during the year,” Justin Sherrard, Global Strategist – Animal Protein for Rabobank, says in the report.
China’s economy is expected to recover further from COVID-19 impacts in 2021, which will support foodservice demand and institutional consumption, as well as household consumption. As pork prices soften from the high levels of 2020, they will get support from improved demand, Rabobank reports.
The implications of ASF for world pork trade are a major swing factor in global pork markets, Rabobank notes. China’s import demand for pork and other species was a major demand driver in global animal protein markets in 2020, but analysts anticipate China’s pork imports will decline in 2021.
“At the same time, we see all exporting countries looking to maintain trade with China. Price will be one major factor that determines which countries will maintain high pork trade flows to China in 2021, along with availability and geopolitical considerations,” Sherrard says.
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