African swine fever is bigger threat to world protein market than COVID-19By Jamie Salter
Australian protein exports remain strong due to high demand from China, according to Rabobank’s latest African Swine Fever Update.
Australia’s total red meat exports were down 16 per cent year-on-year in May but exports to China were down only four per cent.
Rabobank senior proteins analyst Angus Gidley-Baird said considering Australia’s reduced production, current export figures highlighted China’s strong appetite for Australian protein.
“While exports into China are not quite at the levels they were at the end of last year — when African swine fever-driven pork shortages were driving strong Chinese demand and Australian production was much higher — they are close to levels seen at the start of 2019, which is a positive outcome for the domestic industry,” he said.
However, Mr Gidley-Baird said imports for the rest of 2020 could ease through the current quarter, picking up again in quarter three and quarter four.
“But, COVID-19 and slower economic conditions aside, the protein gap created by African swine fever provides a strong demand force that will help support prices for Australian red meat exports for the remainder of 2020.
“African swine fever will continue to underpin Chinese demand for Australian sheep and beef exports, as consumers look to substitute pork with alternative protein options.”
China’s pork production is expected to decline by a further 15 to 20 per cent in 2020, prompting further import demand.
Mr Gidley-Baird said pork imports were expected to reach record levels in China, while imports of other animal protein types would also be strong.
“China’s pork import growth accelerated in the first four months of 2020, with meat imports up 180 per cent, year-on-year, and variety meat imports up 29 per cent year-on-year.”
African swine fever will have a continued impact on pig herds and the restriction of pork production in China, Vietnam, the Philippines and parts of eastern Europe.
The Rabobank update found African swine fever had surpassed the impact of COVID-19 on the global animal protein market.