PORK production in the Philippines is expected to decline 1.5% in 2020 as the hog industry in China and Southeast Asia suffers setbacks due to the outbreak of African Swine Fever (ASF), Fitch Solutions Macro Research said.
In an Oct. 1 analysis, Fitch Solutions said: “Pork production will sharply decline in China and Southeast Asia in 2019 and 2020, with production growth remaining subdued thereafter at the earliest,” Fitch said in its note, “African Swine Fever: SE Asia Food Inflation Risks As Disease Spreads.”
“In particular, we have revised down our 2019 pork production forecast for Vietnam to 2.4 million tons from 2.6 million tons previously,” it added.
For 2020, Fitch projects pork output of 1.6 million tons for the Philippines, down 1.5% year-on-year. In China, it projects a 5% decline to 35.9 million tons, while Vietnam is projected to see production decline by 3.7% to 2.3 million tons.
“Farmers are unlikely to begin rebuilding herds in these countries while the epidemic is still ongoing, and even when monthly outbreaks subside, it can take up to a year for new animals to be ready for slaughter,” it said.
For South Korea, Fitch maintained its 2019 and 2020 pork production estimates since pigs culled represent less than 1% of its herd. Seoul has reported nine cases since September, with 15,000 pigs culled.
In the Philippines, more than 13 areas have confirmed ASF cases in Rizal, Bulacan, Quezon City, Pampanga, and Pangasinan. The hog cull has totaled about 20,000 head.
China has culled about 2 million pigs, which Fitch said could expedite Beijing’s move to consolidate the industry and force out small farmers.
“Large-scale operators will most likely invest in production capacity in the coming years and will be able to help ramp-up China’s pork output from 2021-2022 onwards,” it said.
Vietnam has culled over 4.7 million pigs.
Fitch said the risk to food prices is already showing up in China, where the wholesale prices of pork has reached an average of 35 yuan per kilo as of August, double the price since the beginning of the year, while the wholesale prices of chicken has increased 11.5% over the same period.
“Pork prices will soon start to rise in Southeast Asia as well,” Fitch noted.
Fitch noted that affected countries may have a hard time importing pork since international prices have also risen, leading to a decline in pork consumption in these areas.
“We have revised down our 2020 pork consumption forecasts for China, Vietnam, and the Philippines, expecting year-on-year declines of 2.0%, 5.0%, and 1.0%, respectively,” it said. — Vincent Mariel P. Galang
