African swine fever causes uncertainty in global pork markets

African swine fever (ASF) outbreaks continue to be reported around the world. On March 3, pigs with symptoms of ASF were identified on local farms in Chita, RUSSIA , REUTERS reported. The containment measures went into effect the next day.

Mutagenic strains of ASF in CHINA continue to cause new outbreaks, reducing the country's ability to produce enough pork to meet domestic demand as sow stocks are restored.

Pig prices in Germany remained stable this week as strong domestic sales helped markets recover from a ban on German pork imports imposed by Asian buyers, including China , Reuters reported. While a number of countries have recently eased import bans on German pork, China 's import ban is likely to remain in place through at least the first half of 2021, Rabobank said in its latest report.

Uncertainty is significant when it comes to pig production forecasts for 2021. Rabobank believes hog supply will increase overall in 2021, but expects prices to fluctuate due to these uncertainties around disease progression, restocking, feed costs and import policies.

“We believe that average hog prices in 2021 will be lower than in 2020 and there will be strong ups and downs throughout the year,” Rabobank said in a report.

The Chinese economy is expected to recover further from the impact of covid-19 in 2021, supporting demand for catering services and institutional consumption, as well as household consumption. As pork prices ease off from 2020 highs, they will be supported by higher demand, according to Rabobank.

 Rabobank notes that the impact of ASF on the global pork trade is an important factor in fluctuations in global pork markets. China's demand for imports of pork and other meats was the main demand driver in global animal protein markets in 2020, but analysts expect China's pork imports to decline in 2021.

“At the same time, we see that all exporting countries are eager to support trade with China. Price will be one of the main factors determining which countries maintain high pork trade flows to China in 2021, along with affordability and geopolitical considerations,” the bank said in a report.