Surging global pig price heads towards record level

Growing demand for pork could push global prices to record levels as the effect of African swine fever (ASF) in China is forecast to continue well into 2020.

The latest ASF assessment by analysts at lender Rabobank suggests almost half of China’s herds will be lost as authorities struggle to control the disease.

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This will cause a 25% drop in productivity this year, with a further 10-15% drop in production likely in 2020, according to Rabobank estimates.

Within China, the resulting supply shortfall has seen pig prices rise by 40% in the past two months alone to a record of ¥21.70/kg (£2.46/kg).

To fill the void, Chinese pork imports increased by 12% between January and June 2019 and this has helped draw up export values.

AHDB reported that prices had soared and were fast approaching the global record of $3.50/kg (£2.83/kg), seen during 2014’s porcine epidemic diarrhoea virus (PEDv) outbreak.

The average export price in April was $2.52/kg (£2.04/kg), but by June, it had risen to $2.75/kg (£2.23/kg), up 9% on a year earlier, said AHDB Pork analyst Bethan Wilkins.

Ms Wilkins said the Chinese government had announced this week it would be encouraging further import growth to stabilise escalating domestic pork prices.

“It is probably too soon to see a knock-on uplift at farmgate level. However, this is certainly possible in the future,” she suggested.

Auctioneer and pig industry expert Peter Crichton also expected prices to rise and global export values to reach record levels. But he urged caution.

“China’s government won’t buy in pork at any price and it is increasingly importing alternative proteins like beef and, in particular, chicken,” Mr Crichton said.

“Reports from within China are pointing to a government-backed surge in the number of poultry houses under construction,” he suggested.

“The pig industry should expect growing competition from poultry, which has a 36-day lifecycle and can escalate production much more quickly than pork,” Mr Crichton added.

Ultimately, he expected Chinese imports of alternative proteins to curb the current soaring pig price levels.