In this file:
· Hog markets and the threat of African swine fever
· Pork prices expected to double during Dragon Boat Festival as Hong Kong slaughterhouse reopens following swine fever shutdown
· African Swine Fever Is Spreading Fast and Eliminating It Will Take Decades
Hog markets and the threat of African swine fever
Jim Sullivan, Hong Kong Economic Journal/EJ Insight
Jun 6, 2019
According to the Chinese Zodiac, 2019 is the Year of the Pig. Whether or not you believe in the Zodiac, this year has certainly lived up to its name.
The discovery and subsequent outbreaks of the African swine fever (ASF) virus in China have sent shockwaves through the world pork market. ASF is a highly contagious virus that ravages hog herds. The death rate associated with ASF is over 90 percent and currently there is no vaccine or cure.
China produces and consumes more pork than any country in the world. According to the most recent estimate from the United States Department of Agriculture’s Foreign Agriculture Service (USDA-FAS), China has approximately 430 million pigs. To put that into perspective, the entire US herd is 75 million. So, when estimates pegging potential losses in China at 30 percent of their herd or greater began to circulate, CME Lean Hog futures prices increased sharply and swiftly.
The CME Lean Hog Index tracks the prices of US domestic, producer-sold hogs as reported by the USDA. CME Lean Hog futures and options settle to the Index price and are the only instruments in the world that track the price of hogs.
For this very reason, the world uses the CME as the benchmark price. As ASF has become more and more of a threat to the world’s pork supply, CME Lean Hog futures and options have experienced a significant increase in both volume and open interest.
What to watch for
With so much uncertainty about ASF in China and its potential to spread to other parts of the world, it is likely that volatility will remain high for futures and options...
Pork prices expected to double during Dragon Boat Festival as Hong Kong slaughterhouse reopens following swine fever shutdown
Phila Siu, South China Morning Post
via Yahoo News - 6 June 2019
The price of pork is expected to more than double at Hong Kong’s markets on Friday with the meat in high demand during the Dragon Boat Festival and the city’s main slaughterhouse reopening following a shutdown caused by African swine fever.
The government shut Sheung Shui slaughterhouse last Friday night, its second closure in a month, after health authorities detected the virus in a dead pig. The animal had been imported from Meizhou in the mainland Chinese province of Guangdong.
Thousands of pigs were culled and the slaughterhouse was then cleansed and disinfected. It was reopened on Thursday morning.
But traders complained that fewer pigs were being imported to Hong Kong than usual. According to the government, only about 1,400 pigs passed through the abattoirs on Thursday. Of these, 1,000 were from the mainland and 400 were local pigs.
The privately owned Tsuen Wan slaughterhouse remained open during the past week, allowing a small number of butcher stalls in markets to stay open.
Before the closure of the Sheung Shui slaughterhouse, about 4,000 to 5,000 local and mainland Chinese pigs would be available in Hong Kong each day, traders said.
Pigs would not be available in markets and shops until Friday because of the time it took to slaughter them.
“Pig supplies from the mainland will gradually return to normal,” said Hui Wai-kin, head of the Pork Traders General Association.
Local and mainland Chinese pig traders needed time to get the business back on track after the suspension on the first day and thus fewer mainland pigs were imported on Thursday, he added.
Mainland Chinese traders, frustrated at the sudden closure of Sheung Shui slaughterhouse, also contributed to the drop in supply.
“Imagine traders on the road delivering pigs to Hong Kong and you suddenly tell them not to come. You cannot blame them for having second thoughts about doing business here. They may as well sell the pigs on the mainland,” Hui said.
At Smithfield Market in Kennedy Town, all eight butcher stalls were closed on Thursday.
Butcher Simon Leung was at his stall to prepare for the pigs that would arrive on Friday.
He said the pork prices charged by the suppliers had more than doubled. For 100kg of pork, the suppliers were charging about HK$3,000 (US$383). He decided to buy about 50kg, half of what he would normally get from the suppliers.
“I will lose money if no one is buying … Seriously, I might change my profession,” he said. “I have been idle for so many days. I just cannot afford to do nothing all day.”
Another butcher stall nearby had remained open recently as the store bought its pork from the Tsuen Wan slaughterhouse.
The butcher, surnamed Lau, said prices from his suppliers had more than tripled to HK$4,000 per 100kg. He had no choice but to almost double his selling price, raising a catty of pork from HK$68 to HK$128.
Lau complained the government had not compensated butchers for the “significant” loss of business they suffered when the slaughterhouse was shut down last month. Rent for his stall was more than HK$100,000 a month.
After spending HK$98 on a bag of pork for the Dragon Boat Festival, customer Tong Pui-shuen said: “The price is insane”...
African Swine Fever Is Spreading Fast and Eliminating It Will Take Decades
By Jason Gale, Hannah Dormido and Adrian Leung, Bloomberg
June 5, 2019
The deadly pig virus that jumped from Africa to Europe is now ravaging China’s $128 billion pork industry and spreading to other Asian countries, an unprecedented disaster that has prompted Beijing to slaughter millions of pigs. But stopping African swine fever isn’t so easy.
The virus that causes the hemorrhagic disease is highly virulent and tenacious, and spreads in multiple ways. There’s no safe and effective vaccine to prevent infection, nor anything to treat it. The widespread presence in China means it’s now being amplified across a country with 440 million pigs—half the planet’s total—with vast trading networks, permeable land borders and farms with little or no ability to stop animal diseases.
The number of pigs China will fatten this year is predicted to fall by 134 million, or 20%, from 2018—the worst annual slump since the U.S. Department of Agriculture began counting China’s pigs in the mid-1970s. While the pig virus doesn’t harm humans even if they eat tainted pork, the fatality rate in pigs means it could destroy the region’s pork industry.
Spain’s experience with the disease suggests that a cull alone won’t be enough to solve the problem. The country implemented strict sanitary measures and industrialized its hog production system but it took 35 years and help from the European Union before the disease was eradicated in 1995. The Italian island of Sardinia has been trying unsuccessfully to get rid of the virus for four decades, and its hog population is a fraction of China’s.
One of the reasons why African swine fever is so hard to eradicate is that it’s easy to transmit. In addition to direct contact with an infected pig, the virus can be passed on to animals that eat virus-laden pork or feed, via contaminated clothing or equipment or when a pig drinks water containing even minute quantities of the virus.
Studies show that the strain in China closely resembles one that’s been spreading in Russia and other parts of Europe for more than a decade. But scientists still don’t know the route it took to get into the world’s most populous nation. Without knowing how the virus got in, China’s customs officials will have a harder time preventing repeated introductions.
The disease is now in Mongolia, Vietnam, North Korea and possibly other neighboring countries that lack the resources to identify and control the disease. That increases the risk that, even if China does manage to control the disease domestically, it could re-enter the country via people or pork products that cross the border.
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