June 23, 2020
ASF a bigger burden on global pork than COVID-19, according to Rabobank report
The COVID-19 pandemic has occupied headlines for much of the first half this year, but African swine fever -- according to Rabobank -- remains the bigger problem for global pork markets.
Rabobank's report "African Swine Fever: A Global Update" issued June 17, 2020, shows the impact of ASF on pork markets as well as the impact of COVID-19.
Based on the report, ASF still persists within China, Vietnam, the Philippines and parts of Eastern Europe, hampering productions. However, the virus is now spreading at a slower pace in China and there has been no major outbreak in the country so far. The fall in outbreaks has been attributed to better biosecurity.
In the first five months of 2020, Vietnam continues to witness outbreaks in 19 of its 63 provinces, with around 30,000 pigs lost. Last year, around six million pigs died due to ASF.
Currently, the biggest hotspots are the Philippines and Eastern Europe. Backyard farms in Luzon, the Philippines, saw losses of around 98,000 pigs in the first four months of 2020. Rabobank forecasts a 12% decline in sow and total herds in 2020.
"In our worst-case scenario, the disease spreads outside Luzon, and the 2020 sow herd drops by as much as 29% and total herd by 28%," the report said.
This year, China's pork production could dropped a further 15% to 20%. In Vietnam and the Philippines, decreases would be nearly 10%. As such, these regions will continue to increase pork imports.
ASF continues to spread around the Polish-German border and had hit two Polish farms in late March and early April. The outbreaks resulted in the culling of more than 30,000 pigs. A third case at a commercial farm in eastern Poland was reported in early June.
Although Poland saw 2,487 cases involving wild boars in the first five months of 2020, cases among domestic pigs are limited.
COVID-19, which has struck most of the world by this year, only increases uncertainty for the world's pork market in terms of meat production and consumption. Productions are disrupted by pork plant closures in the United States and other parts of the world as workers fell sick due to the disease. The closing of restaurants and other foodservice outlets during lockdowns to control the pandemic have led to a drop in demand for pork and other proteins.
"While foodservice is now reopening in most parts of the world, and lifting demand as a result, a return of 2019 demand levels is unlikely in 2020," the report said. "The economic slowdown triggered by the COVID-19 pandemic has reduced consumer confidence, and we expect prices will need to adjust to enable consumption to match availability."
While both ASF and COVID-19 have serious implications for the global pork market, Rabobank considers ASF as having a bigger long-term impact.
"Both COVID-19 and ASF are important in driving global pork markets," Rabobank said. "It is our view that ASF will have more profound and long-lasting impacts on global animal protein markets than COVID-19."