Article 23 January 2020
African Swine Fever (ASF) remains the dominant factor for pork prices globally. In China the national statistics agency reported the nation (the largest producer and consumer in the world) produced 42.6 million tonnes of meat in 2019, down 21% from 2018, the number of slaughtered pigs fell a similar amount dropping 21.6% in 2019. There are no official herd estimates, but the agricultural bank Rabobank said in November that production would drop 25% in 2019 and 10% to 15% in 2020. The government has released more than 200,000 tonnes of frozen pork from state reserves since early December; and despite this supply conciding with an initial drop in the wholesale pork price, values are moving higher again (figure 1).
Prices in the EU shadowed those in China with class E peaking at EUR197 100/kg (just 2% off the May 1997 record high for the index) in early December before falling 4% in early January. The lean hog market in the US has not seen the same rally, with trade restrictions between China and the US preventing the important demand from China that is supporting international values. The market continues to gauge Chinese protein demand for the coming year as well as the risks of ASF appearing in other national commercial herds, along with the loss of demand due to higher values. Quite a lot of chew on in the pork market.
The global pig and pork markets are currently being pushed and pulled simultaneously by various factors that could result in major price swings. This environment has resulted in elevated pork price volatility and uncertainty with regards to future investments, stocks, and just about everything else. Read our overview of the potential impact of African Swine flu.
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