Swine fever kills tens of thousands of pigs, may lead to inflation

 

Bloomberg

via The Middletown Press - April 12, 2019

 

Visitors aren't welcome at Zhao Baojiang's pigsty. Those granted access to his fortress-like farm outside Beijing must park a half-mile away, change into shoes he provides, and wear disposable overalls to prevent introducing African swine fever virus.

 

Zhao's fastidiousness about infection control, combined with a towering brick wall protecting his property, probably helped save his 500-hog herd from the deadly contagion that's ravaged pig farms across China since August. Empty barns around his village of Xi Fengwu, about 37 miles (60 kilometers) south of the national capital, indicate few of Zhao's neighbors were as fortunate.

 

The infectious disease has killed tens of thousands of pigs in China, which raises about half the world's hogs. Worse still, stopping its spread has resulted in the culling of millions more, including breeding sows and piglets. Latest government predictions point to a loss of swine this year equivalent to the European Union's annual supply. Zhao, 67, doesn't see affected farms recovering anytime soon.

 

"Not many dare to breed pigs anymore," Zhao said. "Once your farm is hit with the disease, you're left penniless -- which was the case for many last year. It's obvious that there are not many pigs left."

 

That poses a threat to not only the millions of Chinese whose livelihoods depend on pigs, but also to food inflation in a country with the highest per-capita pork consumption after Vietnam and the EU. Wholesale pork prices have climbed more than 9 percent since late July.

 

The higher cost of pork, a key element in China's consumer price basket, will cause the inflation barometer to rise rapidly in coming months, according to economists at Industrial Bank Co., China International Capital Corp., Citic Securities Co., and Nomura International Plc. That may frustrate efforts by the central bank to ease borrowing costs, with the consumer price index predicted to near the highest since October 2013.

 

Domestic pork supply in China this year may fall at least 4 million metric tons below demand, according to Ma Chuang, deputy secretary general with Chinese Association of Animal Science and Veterinary Medicine. He estimates the total hog population may drop by as much as 30 percent in the "year of the pig" from 2018 -- a loss of about 128 million head.

 

"The global market won't have enough pork to supply China," Ma said Tuesday in an interview in Beijing. "The deficit won't be filled even with poultry or other meats."

 

African swine fever may prompt a dietary shift to alternative protein-rich foods, such as eggs and dairy, Ma said. Meat prices, including chicken, beef and seafood, are likely to rise because of a global shortage caused by China's outbreaks, according to Rabobank. China made its biggest-ever purchase of American pork in the week to April 4, pushing up Chicago hog futures.

 

In some areas, weekly pork sales have fallen by half because restaurants are buying less, said Xie Yifang at Xinfadi market, the largest wholesale market south of Beijing.

 

Even after culling diseased and potentially infected pigs, restricting the movement of hogs, and closing live-animal markets in outbreak areas, African swine fever has continued to spread, albeit at a slower pace than at the end of 2018.

 

The Tibet and Xinjiang regions, where pork isn't widely consumed, confirmed outbreaks in early April, highlighting what Han Changfu, China's minister of agriculture and rural affairs, described Monday as a "complicated and grim situation" in arresting the virus.

 

Outbreaks forced farmers to cut hog and breeding-sow numbers by the most in a decade, said Yang Hanchun, a professor with the China Agriculture University. In Shandong, a major hog-producing province, breeding herds decreased by 30 percent in February, according to the government there.

 

Agriculture ministry officials found mass culling of productive sows on some large-scale farms in seven provinces in an investigation earlier this year. Official data show the national breeding-sow herd slumped 19 percent in February from a year earlier after a 15 percent dip in January...

 

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