Global pork market still challenged by ASF and COVID-19

Image by Michael Loudon, via Flickr Creative Commons.

It’s no surprise that African swine fever (ASF) is continuing to impact pork production in Asia and Europe, as well as global trade flows. COVID-19 continues to impact the entire supply chain too, from producers all the way to consumers.

However, there may be some good news here, as Rabobank is predicting demand to rebound in most regions in 2021, due to economic recovery.

Rabobank’s latest pork report anticipates that global supply will grow in Asia, North America, and South America, but faces more challenges in Europe.

While China continues to dominate global trade, the country’s expected reduction in imports in 2021 will have ramifications for the rest of the world — especially Europe — where trade bans on Germany are boosting local supply and weighing on the market.

Chenjun Pan, senior analyst of animal protein with Rabobank, says after rapid restocking in 2020, China will see strong growth in pork production in 2021, with a decline in ASF impacts.

“With production expected to grow by at least 10 to 15 per cent, China’s imports will decline by 10 to 30 per cent this year,” Pan says. “This will still make 2021 the second largest year for imports, but the change in demand will impact all exporters.”

Pan also explains that European pork production is expected to be flat or down slightly in 2021, on lower export demand, a slow recovery of local demand due to COVID-19, and ongoing ASF threats in Eastern Europe and Germany.

On the U.S. front, strong domestic and export demand is helping drive good pork markets, and support continued strength in hog prices. Better sales are helping offset rising feed costs; however, trade policy, immigration, and farm support remain top of mind as the new Biden administration assumes control.

Brazil witnessed record-high exports in 2020. Local prices surged in response to strong export demand and soaring feed costs. As drought impacts yields, global demand remains strong. Hog production is expected to increase by 2.5 per cent in 2021 in response to local demand recovery and another strong year for exports.

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