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African Swine Fever could reshape global trade

An economist says the faltering Chinese pork industry as a result of African Swine Fever could reshape global trade. 

Arlan Suderman with INTL FC Stone says according to their in-country sources China has lost 40 percent of its pig feeding capacity.  “On an annualized basis, that means they’ve lost more pork production than what is produced in all of North and South America combined,” he says. “You simply can’t fill that void – they just have to do the best they can.”

However, he says they don’t anticipate a shortage in supply of pork in China anytime soon.  When the disease first started spreading through the country many hog producers took their herds to slaughter early.  “So there was a big surge of supply initially hitting the slaughter plants and available to the market,” he says.  “In addition, we know that China has a big reserve of pork.”

Suderman tells Brownfield the losses could eventually create additional demand for US pork.  But at the same time, it will likely add even more pressure to struggling US corn and soybean markets.  “Chinese feed buyers still see soybeans prices at current levels as being historically cheap,” he says.  “So they continue to buy and put into storage.  That just means they’ll have beans down the road and we’ll have a depressed market for some time.”

China is the largest importer of soybeans and consumes 49 percent of the world’s pork.

AUDIO: Arlan Suderman, INTL FC Stone