Pork prices surge globally as China struggles with deadly pig plague
BEIJING (AP) - Meat markets across the world have been feeling the effects of a deadly swine disease that is sweeping across China, leading to the death of entire herds of pigs in many parts of the country and spurring the Chinese to import a record amount of pork from other countries.
China produces and consumes two-thirds of the world's pork, but output is plunging as Beijing destroys herds and blocks shipments to stop African swine fever. Importers are filling the gap by buying pork from as far away as Europe, boosting prices by up to 40 percent and causing shortages in other markets.
There's no immediate end in sight as "evidence mounts that China will be unable to eradicate ASF in the near-term," it said in a recent report.
African swine fever doesn't harm humans but is fatal and spreads quickly among pigs. It was first reported in August in China's northeast. Since then, 1 million pigs have died and the disease has spread to 31 of China's 34 provinces, according to the U.N. Food and Agriculture Organization.
The outbreak's scale is unprecedented, said Dirk Pfeiffer, a veterinary epidemiologist at the City University of Hong Kong.
"This is probably the most complex animal disease we have ever had to deal with," Pfeiffer said.
The USDA forecasts China's total hog herd will shrink by 18 percent this year to 350 million animals, the lowest level since the 1980s.
Rabobank, a Dutch bank, thinks that number could be even higher, predicting that Chinese pork output might fall by up to 35 percent.
Global supplies will be "redirected to China," the bank's researchers said in an April report. It said the "unprecedented shift" in trade will likely cause shortages in other markets.
China's biggest foreign pork supplier is Spain, which accounts for 20 percent of imports. Germany supplies 19.5 percent and Canada 16 percent.
U.S. pork sales to China have been disrupted by Beijing's tariff war with the Trump administration over trade and technology. Chinese buyers canceled orders for 3,300 tons of American pork the week of May 6, according to the USDA.
Spanish exports of pork and other pig products to China jumped 32.8 percent in the first two months of 2019 from a year earlier to 117 million euros ($131 million), according to Interporc, a Spanish industry group.
"My suppliers have told me that they are going to raise prices at the end of the month because of what is happening in China," said Jordi Nargares, a butcher in a working class neighborhood of Barcelona.
The jolt to the global meat industry highlights China's voracious demand for food for its 1.4 billion people, the potential for wider disruptions if its own production falters and its growing ability to outbid other customers for supplies.
Grocery shoppers in Germany, Japan and other high-income markets grumble at paying more for kielbasa or tonkatsu, but short supplies are a serious concern in places such as Cambodia where pork is the only meat many families can afford.
Cambodia's live hog price jumped 37 percent in the past six months, according to Srun Pov, president of the Cambodia Livestock Raiser Association. He said the country is buying about 30% of its daily needs of 500-600 tons from Thailand.
Outbreaks of African swine fever have been reported in Cambodia, Mongolia, South Africa and Vietnam.
It's been found among a small number of wild boars, which can spread the disease, in Russia and seven European countries.
Yang Wenguo, a farmer in Jiangjiaqiao, a village a two-hour drive northeast of Beijing, said he has lost 800 pigs. He now has a few dozen.
Most of Yang's pens are empty. White pus drips from blood-shot eyes of one surviving hog. Foam drips from another's mouth. Smaller pigs cough.
Yang dosed his animals with government-subsidized medications but they kept getting sick. The government hauls away dead animals and pays compensation of 1,000 yuan ($145) for a sow and 20 yuan ($3) for a piglet.
"You buy pigs, then they all die," he said, walking on ground covered in disinfectant that looks like dirty snow. Only about 60 to 70 pigs remain from total herds of about 3,000 in Jiangjiaqiao.
Four other families in the village that raised pigs have stopped, Yang said, "No one can bear losing all the pigs they raise." He'd like to sell his farm and find work in the city but no one wants to buy.
In Hong Kong, authorities destroyed 6,000 pigs at one slaughterhouse after an animal imported from the mainland was found to be infected.
Chinese authorities respond to outbreaks by temporarily banning shipments of pigs from any province where a case is reported.
That has caused retail prices to spike in big cities cut off from supplies. Prices paid to farmers have collapsed in areas with a surplus of pigs they can't export.
A half-hour drive from Yang's farm, Wang Lijun breeds his own piglets to avoid buying infected animals. His herd shrank from 160 to 170 animals to about 20 to 30 but none died this year.
"All farmers are cutting production," he said, walking past a row of cages holding pregnant sows.
The number of sows needed for breeding had fallen 19% from a year ago by the end of February, which suggests supply will plunge through next year, the USDA forecasts.
"China's herd-rebuilding will be slow and take years," said Rabobank.
In Vietnam, the government said in mid-May that 1.2 million pigs, or about 5% of its total herds, had died or been destroyed. Rabobank expects Vietnamese pork production to fall 10% this year from 2018.
Chinese companies are investing in farms and food processors abroad to capitalize on strong demand. New Hope Group, one of China's biggest agribusiness groups, said it plans to invest 1.1 billion yuan ($170 million) in three pig-breeding farms in Vietnam.