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While African swine fever (ASF) continues to devastate pig herds and production in China, the focus is now shifting to other parts of Asia, says Rabobank in a new research report. The impacts across Asia are likely to be just as challenging as they have been in China, and the global banker expects to see herd and production losses growing into 2020.
At the same time, price levels in China – for pigs and pork, as well as for other proteins – keep climbing, and China’s structural shortage of protein is becoming clearer. Growing pork exports and rising prices will challenge exporters in all regions to find an appropriate balance between increasing production, chasing high prices for exports, and supporting local customers.
ASF is an expanding, whole-of-Asia challenge, says Rabobank.
ASF represents a major and growing challenge for animal protein in Asia. In many Asian countries, pork is the protein of choice, and its reduced availability, as ASF sweeps the continent, is set to bring lasting change.
ASF has spread into Vietnam, Cambodia, Laos, Myanmar, the Philippines, the Korean peninsula and Timor-Leste, as well as across China. Thailand has established high-surveillance zones along its borders.
Vietnam is the country most affected (outside of China), with the herd already down by almost 20% in 2019.
As at end August 2019, we estimate that Laos had lost 0.5% of its pig herd, while outbreaks in Shan State (Myanmar) have elevated risk for Thailand. It is too early to make reliable estimates of herd losses in South Korea and the Philippines.
Pork imports in Vietnam will rise, but the tight global supply will increase price competition in 2020.
Early herd rebuilding in northern Vietnam has faced setbacks from recontamination. We expect larger, more bio-secure farms to be built. In Vietnam, and elsewhere, we see the pork supply chain changing rapidly, through the exit of household swine farms, closures of illegal slaughterhouses, integration of corporate farms with slaughterhouses, new entrants, and investments in other proteins (e.g., in poultry and aquaculture).
The structural shift in consumption will benefit poultry and aquaculture in the long term, both in imports and local production, subject to competitive pricing.