China is reducing its pork consumption
Pork prices ascension in the Chinese market is slowing down, according to Reuters, and that could be a signal of consumers in the country are reducing their pig meat consumption or that cold storage are emptying their stocks before mandatory checks and test for ASF would start in July.
The latest information released by the Ministry Of Agriculture is talking about a contraction of 22.3% in the Chinese sow herd compared with the figures recorded in April 2018.
"China’s hog prices will accelerate in August is the government mandate that stored pork will be tested for ASF after July. This is encouraging all cold storage pork to be sold prior to that date. In July all pork including live hogs will be tested for ASF at slaughter plants by government officials. Any positive pork or hogs will be burned", commented Jim Long, President&CEO of Genesus INC, in his weekly report.
At the same time, the idea of Chinese consumers reducing their pork intake in the following years is also embraced by Emilio Becker, a Spanish economist and meat market expert. In his opinion, the average meat consumption per capita of 35 kilos recorded last year in China could drop if the consumers find other cheap animal protein to reduce their expenses. "No one can really tell what is going to happen. At some point, they may switch to other meat products such as poultry, beef, or sheep as the pork will become more expensive", explained Mr Becker in an interview for EuroMeatNews.
This scenario was also presented by Christine McCracken, Senior Analyst Rabobank, in her presentation at the International Poultry Council meeting this month. "Hog losses in China due to ASF will trigger big shocks in global protein markets and poultry is the meat protein with the most to win", she explained. According to McCracken, the world may be unable to fill the gap in meat protein foreseen in the country: "China produces 98 percent of its pork, so a forecasted 30 percent decline in supplies there by year’s end will lead to a decline in total world protein supplies in 2019. Expect imports of all proteins (beef, poultry, and seafood) to have a limited near-term impact. Prices for all proteins will rise".
Chinese officials are encouraging pig farmers to repopulate farms as worries grow over the impact of rising pork prices on the economy and social stability but the process may be put on hold for a while as the disease is still present in every province and there is no remedy to solve the ASF situation in the near term.
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