Global pork market with growing speculation on ASF in China

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    Porto Alegre, March 12, 2021 – Over the past few weeks, several reports have been released in international agencies about new strains of African swine fever in Chinese territory, with less lethality than the one that decimated about 40% of the country’s swine herd between 2018 and 2019, affecting the birth rate of matrices, which would put in check the full recovery of production for this year, as expected by the Chinese government. According to the news, the new outbreaks are leading to the acceleration of the slaughter of light animals and matrices, a factor that at first tends to lower pork prices in the territory. However, after this phase, prices may advance, given the tighter supply, but there is a rather uncertain content in these reports. The fact is that pork prices have been on a downward trajectory in China, but that can also be explained by sales of state-owned stocks, which occurred since the beginning of January, with the intention of the government to meet the demand during the extended holiday of the Lunar New Year.

    A noteworthy point is that the loss of the Chinese herd of matrices may reach 15% in this new phase of ASF, as published on the website of the genetics company Genesus Inc., which would correspond to about 6.2 million head when considering the 41.61 million head released by China’s Ministry of Agriculture and Rural Affairs recently. The number of matrices was already unknown before the recent news involving ASF, given the speed of its recovery and the disparity with the USDA’s estimate released in January of 34.250 million head of matrices. Since the beginning of 2021, China has confirmed only a few cases of ASF. The lack of transparency around the disclosure of data blurs the vision of the market.

    On March 5, the United Nations Food and Agriculture Organization (FAO), released its biweekly report with an update of the situation in Asia. Between February 18 and March 4, six cases were reported, as can be seen on the attached map. The Ministry of Agriculture and Rural Affairs reported the detection of ASF in pigs transported illegally to Yunnan province. Low virulence was detected in ASF samples collected between June and December 2020 in domestic pigs in Hubei, Heilongjiang, and Hebei provinces. Two of them were tested in pigs and showed less virulence and high transmissibility. Pigs inoculated with 103 TCID50 of HLJ/HRB1/20 (one of the non-HAD variants) showed mild signs and they all survived during the 28-day test; animals that had contact did not show clear signs of disease until they were sacrificed for necropsy on the 28th day.

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