African swine fever hits pork production in China hard. The loss could amount to 18 million tons or a third of the nationwide production, experts estimate. This is twice as much as it is traded annually on the world market, and is equivalent to US pork consumption of two years.
This opens up great business opportunities for pigmeat exporters in Europe, Brazil and the USA. The US producers, however, have the problem that they often use the growth agent Ractopamine, which is banned in China – as well as in Europe.
In the past few years, for example, the EU has supplied around two-thirds of Chinese pork imports, according to the country’s import statistics. However, demand is likely to be so great in the near future that the EU alone can not satisfy it.
Despite the trade war, therefore, the US pig farmers should, so far as they do not use Ractopamine in the rearing benefit. Allegedly pay large meat processors in the US a premium for meat without Ractopamine.
Worldwide price increase
Last year, the trade war between the US and China halved the market share of US exporters in the Chinese market from 14 to 7 percent. In May, however, US exports rose again by one third, even though the 2018 level had not yet been reached.
In any case, the bottleneck in China is exploiting pig farmers because the global price has risen. In China, prices have risen sharply since March, and the Department of Agriculture expects to see them rise 70 percent over the next few months. Pork production in China is unlikely to recover so quickly, with up to half of breeding sows likely to have died. The return to the old level could take years.