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There Are Not Enough Pigs In The World To Fill China’s Pork Hole

Courtesy of ZeroHedge View original post here.

African swine fever has wiped out herds of pigs all over China – by some estimates more than half – and it now appears the global supply of pork might not be able to satisfy the country's demand in early 2020, reported Bloomberg.

The Ministry of Agriculture and Rural Affairs published new data on Friday that shows the number of hogs in China dropped 40% in Oct. YoY. The decline is mostly due to the African swine fever and farmers culling their herds to prevent further transmission of the dangerous disease. 

The disease has spread from Africa to Europe, and currently across Asia, and are fears pork supplies around the world are dwindling and might not be able to fill China's deficit. Just this week, the Dutch government announced plans to shrink its hog industry (why? because apparently pigs smells – the government says fewer pigs means less odor nuisance and a better living environment, as well lower emissions of ammonia, in the European country with the most cows and pigs relative to land area).

A new Rabobank report projects that domestic pork supplies could hit a three-decade low and lead to higher spot pork prices early next year

In southern China's Guangdong province, spot prices have jumped 230% since January, with much of the gains seen in late summer as the disease gained momentum and farmers were forced by the government to cull more pigs. 

The jumped in spot prices wasn't just because domestic pork production collapsed, but the government has had difficulty sourcing products from abroad. It seems the world doesn't have enough pork for China. 

The trade war, until recently, prevented Chinese importers from souring US pork. China has found alternative sourcing in South America, signing trade deals with Argentina and Brazil for agriculture products. Though it could take months for the pork to arrive in China, the pork deficit will likely increase in early 2020, and spot prices will move higher. 

Food inflation and a decelerating economy in China are a recipe for socio-economic problems in 2020. 

 


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