The first case of this African Swine Fever (ASF) outbreak was reported by Chinese authorities in August 2018 as coming from Liaoning province. Since then, ASF has rapidly spread throughout China and Southeast Asia, affecting every country in the region.
Over 170 individual outbreaks have been detected in different regions of the country, which translates into the decrease of almost 50% in the number of pigs. This decrease represents around a quarter of the world’s pig population, which has had a tremendous effect on imports and prices. As a result, imports are soaring and prices are higher than ever, creating new opportunities for exporters.
In February 2020, the government updated the “ASF Epidemic Emergency Implementation Plan” to implement control measures for the outbreak. Measures include blockades of epidemic sites, compensation for culled pigs and higher standardisation of the pig industry, among others.
ASF Outbreaks in China per month
Source: Eibens with data from OIE
The number of outbreaks has been decreasing in China since July 2019 and the country is making attempts to rebuild its pig herd, showing signs of recovery since the last months of 2019. However, new outbreaks are still appearing.
According to the World Organisation of Animal Health (OIE), since January 2020, 17 new outbreaks have been reported in China, 8 corresponding to farms, 2 wild boar outbreaks and 7 back-yard outbreaks. There are currently 6 ongoing outbreaks in Chinese farms, two of them reported in late April and one reported on June 1st in the city of Lanzhou (Gansu province), which pose a threat to the recovery of the Chinese pig-farming industry.
In order to stabilise and restore pig production, in September 2019, 15 departments including some provincial administrations such as Jilin issued a document including 14 measures to stabilise pig production. According to this, during 2020, a subsidy of 500 RMB (about 65 EUR) will be given to the breeding pigs imported from outside the province, and a subsidy of 50% will be rewarded to breeding pigs imported from abroad. The maximum per company is 2 million yuan.
Moreover, due to the current situation, the Ministry of Agriculture and the National Development Reform Commission urged companies in late March to build farms overseas and raise piglets in countries with stable bilateral trade relations with China, and that are ASF-free. Government recommendations used to focus on trade of pork products or grains, never involved raising pigs abroad, but Beijing has taken extraordinary measures to fill the bigger-than-ever supply gap caused by the ASF outbreak and Covid-19 crisis.
As this process may take some time, companies are already importing live breeding pigs to fill the supply gap. Companies from France and Denmark such as Nucléus, Axiom and Topigs Norsvin have shipped over 6,000 breeding pigs in the first four months of 2020, with a value of almost 12 million USD, over three times more than in the whole of 2019. China’s customs officers said they will develop further agreements to allow more countries to ship live pigs (currently only 5 have a protocol), so genetic companies from other regions could greatly benefit from this trend.
Big players in the industry are investing large amounts of money in building new farms, both in deserted land within China and abroad, although the latter process may take longer. For example, COFCO Meat Holdings is studying the South American market to develop a project that integrates breeding, rearing and slaughtering and Wens Foodstuffs Group built nine new pig farms in the Mainland during the first quarter and has dozens more under construction.. The government urged local authorities to secure building materials to facilitate the developments. Companies from other sectors are also seizing the opportunity and building new farms in the mainland. Examples include New Hope Group which invested 9 billion yuan, and Chinese real estate giant Vanke, which announced in early May 2020 a new project that involves pig breeding.
