African Swine Fever (ASF) is a highly contagious hemorrhagic disease that affects pigs, causing serious economic and productive losses. African Swine Fever can be transferred by direct contact between animals or by circulating contaminated food or equipment.

Currently, there is no specific treatment to combat African Swine Fever once the pig is infected. That is why the only treatment for African Swine Fever is to reduce the spread of the virus to the rest of the animals that are healthy.

This disease affects the pig meat industry enormously and considerably since the only thing that herds can do to reduce the spread and prevent contamination is to slaughter sick pigs.

The largest producer and consumer of pigs is China, followed by the European Union and the United States. With the proliferation of African Swine Fever, it is estimated that there will be a 4% reduction in world pig production, with China leading this decline globally. The large number of deaths in China is partially offset by annual increases of 4% in US production and 6% in Brazil, two of the largest producers in the pig market.

Status of African Swine Fever in Europe

In Europe, the biggest affected country by ASF is Poland. According to data provided by authorities of the European Union, so far, the African Swine Fever (ASF) has caused the death of 10 thousand 515 pigs in Europe; of which 9,721 correspond to Poland. Other European Union producer countries, such as Germany and Romania, currently affected by ASF, have closed their exports to the Asian market, which has resulted in a higher demand for porks in Spain, destined for Asia, and especially to China.

Spain has been one of the most favored pork producers in exporting to China since it does not have African Swine Fever. However, there are factors that may condition the evolution of the market, such as the possible increase in exports from the United States which may  not be favored by issues of the tariff war with China, the recovery of production in Germany or the possible opening of the Russian pork exports to China.

Asia, one of the most affected continents

The African Swine Fever as we pointed out above is a resistant, highly contagious, difficult to control and often fatal disease, it has already passed to different countries in Southeast Asia, such as Cambodia or Vietnam, and it is very likely that it will be detected in others, such as Thailand or Philippines, in each case with the same scenario of late diagnosis and uncontrolled spread.

In Vietnam, it is estimated that almost six (6) million pigs have been slaughtered until the beginning of 2018, which represents 20% of its pig population.

Worldwide, the greatest impact caused by ASF can be seen in China. China has an annual production of 54 million tons, being the world’s leading pork producer with 47.94% of the total, followed at a great distance by the EU, with more than 13% and the US with 10,61%.

China decreases pork’s production due to African Swine Fever

The Chinese are still short of supplies when it comes to their domestic production. Pork production has fallen by about 20 million tons in two years. That gap is very difficult to fill. However, this also affects prices; According to reports from the Ministry of Agriculture and Rural Affairs of China, reported that there was an increase of 3.2% in the local price of pork, since demand exceeded supply, which stood at 5.9 dollars per kilogram.

Another consequence of the spread of ASF in China is that it is estimated that in 1-2 years there will be large investments in pig farms, to modernize them and improve their biosecurity. Also it estimates the transfer to new producing regions both in China and outside its borders. In the same context, China is looking for an agreement with Argentina to invest in the installation of 25 pig production plants in a period of 6 years. In this way, these plants would produce 900,000 tons per year, which would be exported to China. The long-term perspectives are that in 5 years the national production will recover, although China indicates that they will achieve it by 2022; and in 7 years the market will be rebalanced.

A 4% reduction in global consumption is proposed, mainly due to a sharp cut of almost 5 million tons in Chinese consumption. According to the USDA, the shortage of supply would be the main factor, however, a decrease in demand is also observed, since many concerned consumers have opted for other meats that replace pork, even though the disease does not affect humans.

Conclusion

African Swine Fever is a threat that weighs on global swine meat production, increasing tensions throughout the supply chain. Thus, African swine fever is expected to have a significant global impact on meat and feed markets. As an example, the total consumption of feed in China, such as soybeans, decreased by 17% in 2019.

World trade continues adapting in a dynamically way to meet the demand for animal protein. Pork production deficits in China and at the regional level create challenges as well as opportunities for exporters (for example Brazil, the United States of America and the European Union), and for suppliers of alternative animal proteins, as the poultry quote is projected to increase by more than 30% by 2025, at the expense of pork. However, while African Swine Fever creates opportunities, it can also lead to constraints and increase costs throughout the global supply chain.