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African Swine Fever set to increase pork prices by over 20 percent

Posted: 11 April 2019 | | No comments yet

Informa’s Agribusiness Intelligence has revealed that pork prices in the U.S. and Western Europe are expected to increase by over 20% and 15% respectively.

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Informa’s Agribusiness Intelligence, a leading provider of news, data, analysis and forecasts across the agricultural and commodities value chain, has revealed that pork prices in the U.S. and Western Europe are expected to increase by over 20 percent and 15 percent respectively, as African Swine Fever (ASF) continues to plague China – the world’s largest producer, consumer and importer of pork.

China’s ASF situation has already impacted global pork markets, but new data has revealed the extent to which western markets are likely to benefit from the disruption. As hog supplies in the region tighten in the wake of the disease, overseas suppliers are sensing the opportunity to fill the gaps.

Despite the ongoing U.S.-China trade tensions and other challenges presented by rivals in the market, new data from Informa Agribusiness Intelligence predicts that pig meat production in the U.S. is likely to increase by 3 percent in 2019 as producers continue to expand the herd and maintain the momentum started three years ago. The company also predicts that US exports will increase by 20 percent as world pork demand increases in the wake of Chinese shortages.

Production in Western Europe is also predicted to increase by 5 percent. Despite a presence of the disease in central and eastern Europe, major producers in the west including Germany, Denmark and Spain have not yet been contaminated. Therefore, at this moment in time, Western Europe is likely to also profit from increasing import demands.

Similarly, the experience of countries such as Poland shows that ASF does not mean exports are halted altogether. 2019 will likely see further refinements of the EU’s disease control strategy and the industry will be hoping for news of a breakthrough in the development of an ASF vaccine. As such, exports are predicted to increase by 10–15 percent.

David Williams, Director of Global Proteins at Informa’s Agribusiness Intelligence concludes: “African Swine Fever is bringing about huge dynamic change to global pork markets. With China currently unable to stop the spread of the virus, it is needing to source additional product from its trade partners. On a national level, the restrictions imposed on the movement of pigs and pork from affected Chines provinces is causing market dislocations and is, in turn, leading to panic selling and the reduction of pig prices below breakeven in some of the regions affected by ASF. Elsewhere in the world however, the situation is very different – with prices for pigs and pig meat being pushed higher by supply shortages.”

“If the disease is kept out of major producers such as Germany, Denmark and Spain, Western Europe in particular, can expect to profit from a likely increase in Chinese import demand. As things stand, these countries are in prime position to supply the Chinese market leaving ASF-affected countries to fill gaps in some other markets.”

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