Peter Duggan, Meat Division, Bord Bia, - The Irish Food Board
Global meat supplies are being shaped by the fallout of the African Swine Fever (ASF) outbreaks which has predominantly affected China since the summer of 2018. Over recent months the disease has spread into other key areas of Asia while Western Europe has stepped up efforts to withstand the threat from Eastern Europe where the disease is prevalent.
On the back of ASF worsening, GIRA have adjusted their global meat production forecasts significantly in their latest mid-year review, with output expected to fall by 3% to around 310 million tonnes during 2019 compared to prior year levels. Within this breakdown, total pork production is expected to fall by around 13% to 102 million tonnes. However, global growth in poultry, beef and shoat (sheep meat and goat) production is expected to help cushion some of the impact of ASF on global meat output.
Global Meat Production, million tonnes
Given the fallout of ASF in China, pigmeat imports rose by 20% to 658,000 tonnes during the first five months of 2019 compared to prior year levels. This level of activity was influenced by an extremely strong performance during May when imports were 63% higher at 187,000 tonnes according to the Chinese Government's Customs Service. For the remainder of the year, import levels are expected to remain firm given the supply imbalance and this development is expected to support Chinese pigmeat prices further, with current prices 22% higher at 17 rmb/kg since the start of the year. This increase in pricing is currently helping underpin the European pigmeat trade which has risen by 8% to €1.54/kg during the first half of 2019, as the share of European pigmeat shipped to China has risen from 35% during 2018 to 42% for the first 4 months of 2019.
ASF will have an impact on the global meat industry for the foreseeable future, with GIRA expecting the Chinese breeding herd to contract by 30% to 40% during 2019. This translates into a 15-20% drop in the global breeding herd if all other variables remain constant. However, with ASF spreading to Vietnam, Laos, Cambodia, Hong Kong, North Korea and Mongolia, with potential to spread into other geography’s such as Thailand and Myanmar, global production will be further tested.
These developments point to increased demand for pigmeat and other meats for the short to medium term, provided countries/regions can remain ASF free. The importance of this was highlighted last week, where the Philippines banned Germany from supplying the market as raw material was used by a German company which originated from Poland, an ASF affected country. Elsewhere, Western European countries such as France and Denmark have built fences to curb wild boar movements, to reduce the risk of ASF exposure.
https://www.girafood.com/category/gira-news/
http://english.customs.gov.cn/
https://ec.europa.eu/agriculture/market-observatory/meat_en
https://www.globalmeatnews.com/Article/2019/07/04/Philippines-bans-German-pork