South African pig farmers, who have struggled to bring home the bacon due to low prices this year, could benefit from a swine fever problem in China, the world's largest producer of the white meat.
An African swine fever (ASF) outbreak, which is hampering production in the world's most populous nation, is expected to put upward pressure on global pork prices, according to Johann Kotze, CEO of the South African Pig Producers Organisation.
Kotze said if China lost part of its domestic pork production, it would have to import pork and that would put pressure on some markets and drive up demand in others.
The price of pork at the farm gate in SA is now even lower than it was a year ago when a listeria outbreak depressed prices. But at the same time, consumers struggle to afford pork because of high retail prices that do not get passed through to producers, and a tough economy which has devastated disposable income.
"I think the good news is Europe is going to support [China] big time and all the imports from Europe to us are going to be much more expensive," said Kotze.
130 million
The number of pigs that China is expected to lose by year-end
This could result in a higher price for farmers. "I think it's for the good of the rest of the world if China is taking up more pork."
China has been battling with an outbreak of ASF since last year and appeared to have been making progress in containing it.
However, this changed last week as it became clear that the country's containment efforts were not effective and farmers have slaughtered thousands of pigs.
According to a Bloomberg report, China could lose up to 30% (130-million) of its pigs to ASF by year end.
The country has the world's largest pig population and the crisis could see pork prices climb more than 70% year on year in the latter half of 2019.
There is no vaccine for ASF, a disease which originated in Africa. It can be fatal to both domestic and wild pigs.
Paul Makube, senior agriculture economist at FNB, said SA accounts for only 0.1% of world pork exports and is thus an insignificant player.
"However, given the growing Chinese import demand and disease challenges, SA could benefit by expanding production and exports from the 2018 levels of about 260,000 tons and 10,226 tons respectively," he said.According to a biweekly update by the World Organisation for Animal Health, China is not the only country battling the epidemic - it has been found in two other Asian countries, seven in Europe and in SA and Zimbabwe.Earlier this month, SA's department of agriculture, forestry & fisheries announced that there was an outbreak of ASF in the Zeerust area in North West province.On Monday the department and Kotze visited a farm in Delmas, Mpumalanga, where they had to slaughter about 180 pigs in another outbreak."It's a small farmer, who is buying pigs from an auction and then fattening them and selling them. We had a task team from the government and they did an excellent job. They put it [the farm] under quarantine, they put a movement restriction onto it," Kotze said.mashegop@businesslive..