Rabobank: Rising African Swine Fever Losses to Lift All Protein Boats
April 11, 2019
Production losses from African swine fever have eclipsed initial estimates. The Chinese pork production shortfall, along with shortfalls in Southeast Asia, will create challenges and opportunities for animal protein exporters, according to the latest RaboResearch article "Rising African Swine Fever Losses to Lift All Protein Boats."
In 2019, Rabobank expects Chinese pork production losses of 25% to 35% in response to ASF. Reports of extreme losses (over 50%) are limited to confined areas.
"ASF has spread to every province in mainland China and is now affecting an estimated 150-200m pigs, and the expected 30% loss in pork production is unprecedented," said Christine McCracken, RaboResearch senior analyst – animal protein. "These losses cannot easily be replaced by other proteins like chicken, duck and seafood, nor will larger imports be able to fully offset the loss."
Sizable breeding herd losses will delay the Chinese pork industry's recovery. Rebuilding efforts will be further complicated by the risk of recontamination, despite available financial resources.
"Making the situation even more challenging, the disease is spreading into Southeast Asia, causing additional production losses," continues McCracken said. The disease has spread to Vietnam, where we expect production losses to exceed 10%. ASF has also entered Cambodia and could move further into Southeast Asia, with more production losses to follow.
The shift in global trade patterns to meet animal protein demand will be highly dynamic. This will create opportunities for those companies with an exportable surplus and access to China and Southeast Asia. It will also create logistical inefficiencies and raise costs through the entire supply chain.