African Swine Fever Devastates China’s Pig Herd In September 

In August, we reported that at least half of China’s breeding pigs have died from African swine fever or been slaughtered to contain the spreading of the disease. 

New figures published Monday from the Ministry of Agriculture of the People’s Republic of China showed the pig-apocalypse continues to get worse. The country’s herd in Sept. collapsed 41.1% YoY.

China is losing millions of pigs to an outbreak of African swine fever https://t.co/VypseSLjPK pic.twitter.com/1IWZmpNBJX

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While government estimates are more conservative, the recent plunge in pig herds across the country could be around 50% to 55% by late 4Q19, Rabobank told Reuters.

“Next year, especially in the first half, production will go down further,” Pan Chenjun, senior analyst at the bank, told Reuters last Friday.

The supply of the country’s favorite meat has collapsed by 40% to 50% this year, depending on what statistics you read. This has already devastated rural communities and pushed up food prices to crisis levels. 

“Something like 50% of sows are dead,” Edgar Wayne Johnson, a veterinarian who has spent 14 years in China, told Reuters in June.

As the chart below shows, the Pork Index Guangdong Daily priced in dollars per kilogram has soared to record highs in Oct., adding pressure on Beijing to contain food-price inflation during the trade war with the US.

The cause for the price surge is well-known: African swine fever, which has been raging across China, and Asia, has decimated pork supplies. 

Pork prices are likely to remain elevated for some time, said Betty Wang, a senior economist at ANZ. She said farmers had culled so many pigs that it would take a while for supplies to build up again. “If people feel that food inflation is going up, it may spur policy actions,” she added, although it wasn’t clear just how Beijing can find a quick and easy substitute to domestic farms.

An apparent trade truce between China and the US reached last Friday could be what China needs to stabilize its pork supplies. 

China has said it could import as much as 400,000 tons of pork as domestic supplies shrink. The country is likely to boost purchases of pork from the US in the coming weeks.