Market Morsel: Pigs might fly.

Market Morsel

Virii have been front and centre of markets for the past five years.

We all remember the clamber and concern last year when foot and mouth disease was detected in Indonesia; it’s gone off the media radar but is still a present risk (same with LSD). There was COVID, which is still an ongoing issue with hospitalisation rates still an issue.

One other virus had a huge impact – African Swine Fever (ASF). This disease ran through Asia in 2018/19, and caused China to be 25m tonne short on meat (see Aporkcalypse now).

This was great for Australian farmers, as Chinese consumers purchased protein from wherever they could. At this time, Australia was destocking due to drought, and it meant that farmers were getting a higher price for livestock than they would have had in previous destocking phases.

So let’s look at some charts.

The first chart shows the imports of pork into China; we can see that they hit record levels in 2020/21 as their swine herd was destroyed. They had no pork and needed to import from all over the world. Their imports are still high but have been coming back down to more normal levels.

The second and third charts show that pork prices in China hit new highs before returning to more normal levels. These highs in pork pricing were a major issue, as it caused inflationary pressure due to their predilection for pork meat.

These charts show that the situation in China in relation to ASF is back to normal. The disease, whilst devastating for Chinese farmers, provided ample opportunity for protein producers around the world.

It hasn’t gone completely. The disease has been found in Indonesia, which live exports pigs to Singapore. This has resulted in the Philippines banning imports from both nations. ASF is extremely virulent, and if it continues to spread throughout Asia, then that may provide opportunities.

At present, it is providing some extra export opportunities for Aussie pork to Singapore.

Let’s just make sure it doesn’t get into our pig herd.