analysis

Promising pork prospects despite ASF woes

By Ashley Williams contact

- Last updated on GMT

The US and Brazil has high hopes for the pork market despite the threat of ASF
The US and Brazil has high hopes for the pork market despite the threat of ASF
The Brazilian and US market is feeling optimistic about the growth of its pork industry during 2019 despite the threat of African swine fever (ASF) hanging over most pig producers.

According to Rabobank’s pork quarterly report 2019, ASF stands out as the single biggest challenge facing global pork in 2019, but would bring opportunities for some markets.

Expectations of strong demand from China and large breeding herds are expected to boost pork production in the US by 4% during 2019. Rabobank has predicted that exports will improve during 2019 despite the on-going uncertainty of US-China trade.

Brazil is expected to undergo a U-turn in terms of pork trade after a bumpy and challenging 2018. The recent return to the Russian market and demand from China is expected to drive exports for the South American country, while local demand has the potential to improve further due to the positive economic landscape.

ASF has caused a nuisance for the majority of international markets, particularly in China. The Chinese Ministry of Agriculture confirmed this week that since the beginning of the epidemic in August 2018, authorities have been forced to cull over 900,000 pigs.

But it seems that the problematic disease is only going to spread faster in China during 2019 and is “reshaping the industry​”, according to Rabobank’s senior analyst for animal protein Chenjun Pan.

Production expansion and replenishment are expected to markedly slow due to great concerns over biosecurity measures​,” said Pan. “While pork supply is believed to be sufficient in Q1, the big supply issue will arise later in the year, with pork imports expected to increase substantially due to local supply shortages​.”

Meanwhile the disease has also hit European borders, with Belgium and Poland bearing the brunt of the problem. Despite the threat, Rabobank forecasts the EU pork market to remain stable for the remainder of the year, but will witness some hiccups.  Rising piglet prices in recent months signal tight piglet supply, but also strong production intentions. The uncertainty of Brexit is also expected to roll on for the next few months, leaving EU pork traders scratching their heads.

2019 could be a year full of potential in global pork, with growth in production and demand in many parts of the world. Yet this potential could be overshadowed by the uncertainty created by ASF.

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