October 21, 2019

African swine fever impacts China's corn sector


Corn prices have fallen with lower demand for swine feed due to the ASF spread that has initiated mass culls in China, with the swine population falling by 41% since the epidemic started in August 2019, reported Financial Times.


Prices for corn have gone down by 10% to RMB1,859 (US$263) per tonne on the Dalian Commodity Exchange.


Almost a third of the country's annual output of corn is channelled to swine feed, according to commodity consultancy Sublime China Information (SCI). 


Zou Jun, an analyst at SCI said swine consumption might stay weak in the next months and years. He estimated this year, ASF will diminish China's corn consumption by 40 million tonnes.


China's official statistics show the country's swine feed output fell 14% in the first half of 2019. During the same period, swine herds have also dropped slightly over 25%.


Corn trading companies such as Liujia Tongfeng Grain Trading Co reported more than 50% drop in orders from swine feed factories following the rise of ASF in the country's central provinces, where the bulk of swine farms are located.


Feed plants have also reported significant decrease in demand for swine feed. Shunxing Animal Feed Co located in the central province of Jiangxi announced lower monthly sales of swine feed, from an average of 13,000 tonnes before the ASF spread to fewer than 2,000 tonnes now. 


Feed suppliers have requested farmers rebuild decimated pig herds, but farmers are fearful the disease will strike again as ASF continues to spread in China.


- Financial Times