PIG DISASTER MAY RESHAPE GLOBAL TRADE
The Year of the Pig in China is quickly becoming the Year of the Pig Disaster. African Swine Fever (ASF), which has been spreading across Eurasia since the late 2000s, has ravaged the Chinese pork industry after it fi rst appeared in the northeastern city of Shenyang last summer. As of late March, according to INTL FCStone’s in-country sources, some 40% of the pig feeding capacity had been destroyed, and insiders on the ground worry there may be no stopping the disease before it decimates the industry.
Although ASF poses no threat to human health, it represents a twofold challenge to the global economy. First, pork is far and away the dominant meat source in China. It makes up 3% of the country’s consumer price index and is the number one driver of food infl ation. As the industry declines, it will have farreaching eff ects on the world’s second-largest economy.
Second, China’s preference for pork makes it the world’s largest hog consumer, with a market share of 49%. The country is also the largest importer of soybeans, a primary protein source for hog farming. Consequently, the faltering of the Chinese pork industry will reshape global trade in both meat and feed grains.
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