market in the world, has su ered a catastrophic collapse in its pig
industry due to African Swine Fever (ASF). The first outbreak was o cially
announced in August 2018 and since then an estimated 40 per cent of
their national sow herd has been culled which equates to nearly a quarter
of total global pig production.
sows have been culled in a 14-month period. The scale of this decline is
simply astonishing when we consider that the total European sow herd is
12 million. This devastation of the sow herd will result in an estimated 180
million fewer Chinese pigs being produced and entering the marketplace.
The estimated 40 per cent drop in pig numbers was further confirmed last
month by the annual reports of the three biggest Chinese pig companies
(Wens, Muyuan, & Zhengbankg) who reported a combined drop in sales
revenue of 39 per cent.This shortfall of available Chinese pigmeat will
be partly met by a switch in meat consumption but mostly by increased
pigmeat imports from the E.U. and the U.S.
comprising 65 per cent of the total meat consumption. Pigmeat is
associated with times of celebration and feast days such as the Chinese
New Year and because of this high status in Chinese life it usually has a
low elasticity of demand i.e. demand is not sensitive to price increases.
However, a speaker at the Dalan Corn Conference last month estimated
that pigmeat demand has unusually fallen by 11 per cent due to the
sharp increase in market price and the irrational fear surrounding African
Swine Fever despite the fact that it is completely harmless for human
consumption. The switch from pigmeat has largely been to the benefit of
although extensive sow culling began in August 2018 the Chinese pig
price did not start to increase until July 2019. Why the long time-lag?