More Countries Battle African Swine Fever

27 August 2019

China’s African swine fever (ASF) epidemic is spreading despite the government’s additional efforts to control movement of the disease.

The Chinese cabinet announced on Aug. 21 that it would speed up subsidy payments made for pigs culled because of ASF. The 1,200-yuan-per-head payment is designed to incentivize reporting and halt the disease’s spread.

Since the country’s initial ASF finding in August 2018, China’s hog herd has fallen by 30% and hog prices are up 80%, according to data from JCI, a Shanghai-based data firm. Chinese pork imports are up 36% this year. There is speculation that it may take up to two years to rebuild the hog herd in China because new, uncontaminated farms need to be developed.

The chart above shows daily national average hog prices in China. Hog prices have risen by more than 25% in the month of August alone.

Given the growing number of outbreaks in neighboring countries, China’s new efforts to contain the disease may prove futile. In recent weeks, new cases of ASF have been found in other countries in Southeast Asia, including Vietnam and Cambodia, and in Hong Kong.

On Aug. 13, ASF was detected during an inspection on the border of Shenzen, China, and Hong Kong. If further restrictions from the Hong Kong government are put in place, the Hong Kong meat market could be significantly disrupted, since China supplies approximately 2,000 hogs a day to Hong Kong.

In Vietnam, ASF cases have now spread to large, industrial farms after first being reported at only household farms. As a result, the government has culled 2.8 million hogs this year, nearly 10% of the herd. In Cambodia, ASF has been spotted in five provinces, up from two in April. The government has placed restrictions on live hog and pork product movements. The Philippines has implemented precautionary measures, restricting animal movements to go along with the existing ban on pork imports from China. Given the trend of infections, there are fears that the disease will soon spread to Thailand and its $3 billion per year pork industry.

With hog herds and pork production falling, several countries have turned to the US to source their pork meat. 2019 exports from the US to Vietnam and Thailand are more than double last year’s pace, according to data from the USDA’s Export Sales report. US exports to China have surged nearly sevenfold, albeit from a very low 2018 base caused by steep import tariffs.

The charts above show weekly pork exports from the US to China (left) and other select Asian countries (right). The US has filled the supply void left by China in the wake of the African swine fever outbreak. Click on the image to go to an interactive display on the Gro web app.

Both the USDA and JCI expect Chinese pork consumption to fall by around 10% this year. As ASF spreads, consumption is bound to fall in some of the other affected countries. Imports of soybeans and other grains will likely be depressed as demand for animal feed declines. Consumption of pork substitutes such as poultry and aquaculture will also increase if pork prices continue to rise.

The charts above show annual pork consumption in China (left), Hong Kong, and Vietnam (right) from the USDA's PS&D. Consumption is expected to decline by approximately 10% in China and Hong Kong. Consumption in Vietnam is currently expected to rise, but that figure may be at risk for a downgrade in ASF continues to spread. Click on the image to go to an interactive display on the Gro web app.

New ASF cases are not limited to just Asia. Romania’s pork industry is also continuing to struggle with ASF. Following an initial outbreak in the summer of 2018, herd culling reduced domestic swine inventories by 11%. Detections of ASF cases slowed during the spring, but have rebounded seasonally in the summer, mostly concentrated among the wild boar population. As a result, Romanian pork meat exports to Europe, its key trade destination, fell by 44% in the first four months of 2019.

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