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Hog virus in China threatens pork supplies at home and abroad

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Workers in protective suits are seen at a checkpoint on a road leading to a village near a farm where African swine fever was detected, in Fangshan district of Beijing, China, 23 November 2018 (Photo: Reuters/Stringer).

In Brief

China’s traditional calendar showed 2019 beginning on 5 February as ‘the Year of the Pig’. And it will be. In August 2018, an incurable swine virus was discovered in Liaoning province. It could be a global game-changer, not just for pork but for other animal-based proteins too.

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The virus — for which no vaccine exists — has now spread over 3000 kilometres across China’s vast swine sector, likely killing millions of pigs (official government reports were 916,000 in mid-January, but are believed to be under-reported).

African Swine Fever (ASF) is the most feared hog disease globally. The virus spreads via wild boars, ticks and meat products. Mortality rates approach 100 per cent. The virus is resilient, surviving up to 1000 days in frozen meat and 30 days in infected pig pens. It poses no risk to humans — eating the pork is completely safe.

Chinese hogs may have contracted the virus via food waste from planes, ships or trains transiting from Europe and Russia where the virus has been spreading since its arrival from Africa in 2007. The virus could have also been introduced via wild boars, found in a continuous chain across Siberia from Europe to China.

Once confirmed in wild boars (as it now has been in China) it is nearly impossible to control as those boars then infect domestic herds. Infected Belgian wild boar have jumped initial control zones and were recently found within one kilometre of the French border. Once a nation discovers ASF, their pork exports are quickly banned by nervous trading partners seeking to avoid the same fate.

The Chinese government initially reported over 100 outbreaks of the virus spanning the eastern third of China (where most of the nation’s 450 million pigs and 1.3 billion people live). ASF outbreaks were initially reported by the Ministry of Agriculture and Rural Affairs, but those reports are becoming more sporadic. Commercial farmers and vets operating in rural areas confide that as many as 90 per cent of cases are not being reported.

Government compensation for pig losses are set at 800–1200 RMB (US$118–177) per hog, well below market value, but most farmers report that compensation payments are not being made. This means that local outbreaks trigger farmers (and neighbouring farmers) to sell pigs as fast as possible, sick or not, to avoid major losses. As diseased hogs move, so does the virus.

Chinese officials swiftly moved into a form of ‘media lockdown’ over ASF. There are reports of arrests and fines for even discussing ASF on the social media platform WeChat.

So what does this mean for China and the world?

China is not a major pork exporter but is the world’s largest consumer and importer. Chinese are the most voracious consumers of pork globally, eating almost 90 pounds (40 kilograms) per capita annually. In fact, Chinese pork consumption equates to 20 per cent of global protein consumption (beef, pork, and poultry).

Pork imports will not be sufficient to fill the impending gap. Total global pork exports in 2018 accounted for only 16 per cent of China’s massive consumption.

What happens as China’s hog losses mount, reducing pork supplies? Chinese pork prices will surge as markets allocate the scarce resource. Import demand will follow, sparking a global pork price rally. Secondary effects will be felt in global beef and poultry markets as substitutes for scarce pork. In a worst-case scenario Chinese social stability is threatened. And that is China’s greatest fear.

But the fears don’t stop there. The virus was recently found in Vietnam and will likely infect the Koreas. It could further spread to Thailand and the Philippines. Even faraway nations face ASF risks, including North America. Tourists carrying meat products containing the virus have been found by airport authorities in Japan, South Korea, Thailand, Taiwan and Australia. These infected products are likely circling the globe now and risk infecting wild hogs that forage in garbage dumps.

Chinese national food policies could be altered. In 2008 prior to the Beijing Olympics, a much less-severe hog disease drove China’s food inflation rates to 23 per cent and sent the Chinese government to secure ‘intervention stocks’ of pork from foreign suppliers including the United States. With the United States currently the second largest global pork exporter (behind the European Union), China will be hard pressed to ignore them as a source for importing pork. Under the current US–China trade friction, China imposed 50 per cent retaliation tariffs on US pork (in addition to a regular 12 per cent tariff). Pork shortages in China could play into the US–China trade talks as China seeks reliable global suppliers.

There is no easy solution for controlling ASF in China. For China to begin dealing with this complicated pork crisis, officials must become more transparent in their disease-reporting and share research on how the virus is spreading with the global scientific community. Collaboration with foreign veterinarians and food safety inspectors could help prevent further spreading. ASF is not just a China problem, it is now a global problem. And global problems require global collaboration.

Brett Stuart is a Founding Partner and President at Global AgriTrends.

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