Wednesday, February 26, 2020

China Reshapes Global Meat Markets as African Swine Fever Rages

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LONDON/BEIJING—China is scouring the world for meat to replace the millions of pigs killed by African swine fever (ASF), boosting prices, business and profits for European and South American meatpackers as it re-shapes global markets for pork, beef and chicken.

The European Union, the world’s second largest pork producer after China, has ramped up sales to the Asian giant although it can only fill part of the shortfall caused by ASF. Argentina and Brazil have approved new export plants to meet demand and are selling beef and chickens, as well as pork, to fill the gap. U.S. producers, however, have been hampered due to tariffs imposed by Beijing.

Other Asian countries are also ready to step up imports as they, too, deal with outbreaks of ASF. Vietnam, the Philippines, North and South Korea, Laos, Burma and Cambodia are all struggling to contain outbreaks of the disease, which is deadly to pigs although not harmful to humans.

“It is very good news for those involved in processing and have licenses for exports to China,” said Justin Sherrard, global strategist, animal protein at Rabobank.

Major EU pork processors include Danish Crown, Tonnies Group and Vion Food Group although the market is fragmented with many small- and medium-size players.

Pork for sale is seen at a supermarket in Beijing, China on April 11, 2019. (Jason Lee/Reuters)

Shortages in the world’s top pork consumer have been exacerbated by the upcoming Lunar New Year celebrations in late January, when pork, and pork dumplings in particular, play a central role in the food on offer.

One of the biggest European players Danish Crown said there had been a very clear jump in demand from China in the run-up to the Lunar New Year and it was bullish on the outlook for 2020.

China’s state-owned agriculture conglomerate COFCO said this week it had agreed to buy $100 million of pork from Danish Crown in 2020 to help ease the domestic shortage.

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