Market Morsel: Pulled Pork
One of the significant drivers of protein prices around the world during the past two years has been the movement of African Swine Fever (ASF) into China. In September, we discussed the gap that China had to fill to meet its protein requirements (see here).
There is speculation that the Chinese herd rebuild is happening faster than expected, however domestic prices are remaining very strong, well above what would be considered normal.
This is in part driven by Chinese restrictions on various imports of livestock proteins from around the world for both reasons of COVID & ASF.
Whilst ASF has been rampant throughout eastern Europe for a number of years. It has only recently been detected in Germany for the first time in the wild boar population in recent times. However, it is not the first time that it has been detected in western Europe, with outbreaks in 2018 in Belgium.
The fear of disruptions to Chinese food supplies has resulted in German pork being banned in China. The European pork industry was already in strife due to reduced foodservice demand impacting on pork consumption.
The ban on exports to China has exacerbated an already poor situation resulting in diminished pricing levels in recent weeks.