While African Swine Fever remains contained in China, a resurgence of the disease would delay efforts to rebuild the swine herd after several years of decline, reduce global grain prices and increase the cost of meat.
An outbreak of African Swine Fever (ASF) in 2018-19 led to the cull of about 200 million pigs in China and reduced the Chinese swine herd by almost 50 per cent. The spread of the virus and the cull that followed it reduced the global pork supply by an estimated 25 per cent. The number of ASF cases declined significantly in the second half of 2020, leading the Chinese Ministry of Agriculture and Rural Affairs (MARA) to claim that the swine herd had returned to about 90 per cent of its pre-cull size. It aims to return the swine herd to its pre-cull size by June 2021. The virus is also present in parts of Europe and Africa and has spread into most of South-East Asia and the Koreas.
China is the largest producer and consumer of pork, which is the main source of protein for the country’s 1.4 billion people. Chinese meat consumption declined to its lowest point in more than a decade in 2020, leading to suggestions that consumers are moving away from meat as a symbol of wealth.
After the large cull of the country’s swine herd, China distributed pork from its strategic reserve to stabilise prices (between 2018 and 2019 the price of pork more than doubled). The size of that reserve is a state secret, but it is estimated that reserves declined by about 452,000 tonnes between September 2019 and August 2020. As the pork supply was still considerably lower than usual in 2020, it is possible that reserve supplies have been exhausted. Pork imports more than doubled in 2020, compared to a year earlier and, as the market supplemented pork with other meat products, imports of other kinds of meat also increased over 2019-20. Some of that demand could be attributed to the state rebuilding the strategic reserve.
MARA claims that ASF is under control and that the swine herd recovery is better than expected. The reported production numbers do not always reflect reality, however, as provincial governments often report larger production quantities to meet central government targets. The pork industry still faces considerable hurdles in rebuilding, especially as ASF has not been completely contained.
High pork prices encouraged Chinese farmers to rebuild their herds, but ASF continues to spread in China (albeit at lower rates than previously). New variants of ASF have also been discovered in China and are believed to have spread through the use of unlicenced vaccines. There are anecdotal reports that seven to eight million pigs have been culled in recent months as a result of the new variants.
There is currently no effective vaccine against the virus and Beijing has urged farmers not to use any vaccines in its treatment. MARA has instructed provincial governments to increase the penalties for anyone found to be using fake ASF vaccines. The new variants are milder and more difficult to detect, leading foreign analysts to suggest that China will not succeed in rebuilding its swine herd by June 2021.
Feed grain prices have increased to six-year highs, partly as a result of efforts to restock the Chinese swine herd. That is expected to increase global food prices considerably over the next year as China continues to import large amounts of grain. A second wave of ASF could reduce grain demand in China, however, and increase demand for other meat products. There are already indications that fears of a second wave are leading to increased demand for other meats, such as lamb.
New ASF variants are unlikely pose a threat to Chinese pork production, provided that biosafety measures continue to be implemented effectively. If the new variants break containment measures and spark a second wave of the virus in China, however, it is expected to contribute to a reduction in global grain prices and an increase in global meat prices.