April 13, 2020
 

 

With attractive profits and government policy support for swine producers, China's swine inventory is rising, though in a limited manner. Though sporadic cases of African swine fever (ASF) persist in many parts of the country, the experience in ASF prevention and control accumulated over the past year is beginning to show its effect. Quarantine, disinfection and disease elimination are the main methods. It is now common industry knowledge that 2020 will see an overall shortage of swine. Due to weak demand following the Spring Festival and government policy pressure, pork prices declined to about RMB18-20 per kilogram in April. It is expected that prices will firm up with rising purchases from companies and the F&B sector in particular. It is interesting to note that current high profits for swine producers have diluted their interest in availability of an ASF vaccine.

Piglet supplies are also tight, with the national average price surging beyond RMB100 per kilogram. Production costs, including of feed and feed additives, have also risen significantly. While this is a superimposition of risk factors, they provide strong support to future swine prices.

ASF has led to thorough disease prevention and cleaning up of most swine farms, from the introduction of breeds to the farm gate. Common swine diseases are no longer visible, and the use of many common veterinary drugs have been shelved. The necessity of vaccine use for diseases such as classical swine fever, foot-and-mouth disease and pseudorabies deserves to be reassessed. Saying that ASF has resulted in a rethink of swine production practices is not an overstatement.

The impact of COVID-19 on China's poultry sector has basically been eliminated, with prices of poultry products remaining at a high level. With the reopening of live poultry markets and production channels for yellow-feather broilers, restocking of inventories is expected to be more active.

Helped by buoyant market conditions last year, China's egg inventory rose in April. However, demand picked up relatively slowly, with egg prices staying at about RMB6 per kilogram. It is expected that with the increasing egg production rate, coupled with a rising market share of native eggs, opportunities for a rise in egg prices would increase.

For China's broiler sector, release volumes grew month-on-month in April, but the increase was relatively small. As live poultry markets reopen and large F&B establishments and hotels resume operations, demand from end consumers would rise, supported by the shortfall in pork, and outlook for the broiler sector is expected to improve beyond April.

With rising temperatures and strengthening of flock immunity, the poultry disease situation in April was generally stable. Threat from Mycoplasma and bacteria-related  respiratory and enteric diseases was reduced. For infectious viral diseases such as Newcastle disease, infectious bronchitis and infectious bursal disease, vaccines provide protection.

On March 27 the Ministry of Agriculture and Rural Affairs issued Announcement 285 reiterating requirements in ASF disease prevention and control, including: not covering up the epidemic situation; not selling swine suspected of being infected with ASF; not illegally using ASF vaccines; not using unregistered vehicles to transport swine; not changing the transport destination of swine without authorisation; not illegally handling the epidemic situation.