STRATEGY ▶▶▶
Disease causes shift in protein market
Normally Poultry World wouldn’t pay much attention to pig production, but with the ongoing outbreak of African swine fever in China and many other parts of the world, we cannot turn a blind eye. The pig disease is causing a huge shift in the world’s protein market with consequences for soybean and chicken production.
“T BY FABIAN BROCKÖTTER
he African swine fever epidemic can be- come a game changer, changing the posi- tion of the entire agricultural sector around the world,” said Alltech’s CEO Mark Lyons at
the companies technical summit in Dublin recently. His feel- ing for the market is underlined by a report by Food & Agrib- ank Rabobank. It foresees that the loss of animals and thus protein production, mainly concentrated in China, will lead to a shift in worldwide trade patterns of animal protein. The sit- uation in China is grave. Rabobank sees that production loss- es from African swine fever have eclipsed initial estimates. In 2019, the bank expects Chinese pork production losses of 25% to 35% in response to ASF. Since its discovery in August 2018, ASF has spread to every province in mainland China. With ASF now affecting an estimated 150-200 million pigs, the expected 30% loss in pork production is nearly 30% larg- er than US pork’s annual production and equivalent to Eu- rope’s annual pork supply. On top of this, in some areas of China over 50% of production is affected and the disease has spread to Vietnam, where Rabobank expects production loss- es to exceed 10% and it has entered Cambodia and could move further into Southeast Asia, with more production losses to follow.
Good cards for poultry Even if the disease is stopped in its tracks, which is unlikely, it will take a least 3 to 5 years for pig production to recover. This is mainly due to the fact that a large part of the breeding stock is affected too. China will try to source pork meat elsewhere,
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driving up prices, but a shift in animal protein is on the table as well. Rabobank expects available global protein supplies to be redirected to China in an effort to satisfy the growing pro- tein deficit. A secular shift towards lower Chinese pork con- sumption will support increased demand for poultry, beef, seafood, and alternative proteins that will shape global pro- duction trends. “The huge pig meat deficit cannot easily be replaced by other proteins like chicken, duck, seafood, beef, and sheep meat, nor will large imports be able to fully offset the loss,” says RaboResearch senior analyst Christine McCrack- en. However, the cards are in the favour of chicken produc- tion. As the poultry industry has a relatively short production cycle, it can shift gears quickly to the new market conditions. Market access to China can be a hurdle for foreign chicken producers, but with the lack of parent stock in China and the estimated 10 million metric tons of supply gap of animal pro- tein, the Chinese government has to move in an effort to pre- vent empty supermarket shelves. Sooner or later China will
PHOTO: HANS PRINSEN
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