Pork prices in China may soar by more than 70% by next year, as hog populations — ravaged by the African swine fever virus — plunge to “historically low” levels. Production levels could recover only by 2021 or later, experts say.
Meanwhile, the disease, deadly to pigs but not contagious to humans, has spread beyond China, the world’s biggest producer of pork. It has hit Southeast Asia and parts of Europe, with the risk that the outbreak might spread, worsening global supply shortfalls, say experts.
That will drive up global pork prices, they say, although most could not provide estimates, citing China’s lack of transparency or ability in providing accurate numbers of pig herds.
But in China, prices could hit a peak of 33 yuan ($4.90) per kilogram in January 2020, from the 18.5 yuan-per-kilogram price point in February this year, according to a prediction by Japanese bank Nomura. That would represent a roughly 78% jump.
That’s on top of a surge of nearly 40% from a low in May 2018, explained Nomura in a recent report.
China had gone through three large swine disease outbreaks, or “hog cycles,” before this, which saw pork prices surging. But this time, prices could be driven higher than ever before, said Nomura.
“Despite the rise in pork prices, pig farmers may be reluctant to increase hog stock on concerns about (African swine fever). In this regard, the upturn of the hog cycle could last longer and drive pork prices higher than in previous hog cycles,” the bank said.
Nomura also referred to other major factors for its prediction, such as a falling hog-to-corn price ratio — indicating that feeding costs versus the price of a hog has become unprofitable — as well as the stock of breeding sows falling to “historically low levels.”
With the declining stock in China weighing on global supply, U.S. hog prices could be driven up as well, said Mavis Hui, senior research director at DBS Bank in Hong Kong.