China's soybean demand is seen steady on strong hog herd recovery from the African swine fever epidemic, market sources told S&P Global Platts March 18.
With the hog herd recovery on a swifter-than-expected curve, China's soybean demand has also been projected to hit record highs.
According to S&P Global Platts Analytics, the world's largest soybean purchaser is expected to import all-time high volumes of the oilseed in 2020-21 and 2021-22 marketing years (October-September) at 100 million mt and 110 million mt, respectively.
World's second largest economy is heavily dependent on soybean purchases as it processes over 80% of imported beans into animal feed. China's hog producing capacity continued to grow in January and February, with the sow herd increasing by 1.1% and 1% month on month, respectively, according to the latest survey data from Chinese Ministry of Agriculture, or MARA, released March 18.
China's sow herd has recovered to 95% of pre-ASF 2017 level, as of Feb. 28, up 2 percentage points on Dec. 31, MARA said.
In addition, country's hog herd is seen at 400 million head by Feb. 28, compared with 406 million Dec. 31, National Bureau of Statistics said March 18.
ASF in China
There have been reports of ASF outbreaks across some parts of western China since January. But the market analysts view them as isolated incidents, unlike 2018 and 2019 outbreaks, when almost whole of South-East Asia was affected.
As soon as the latest ASF virus strains of the January outbreak were discovered, hundreds of pigs were culled as a preventive step, reducing the chances of contagion, the sources said earlier.
“Although the latest outbreak is not a serious issue in China at the moment, we need to watch how this develops in coming days because the resurgence of the epidemic in China will affect market sentiment badly, particularly when the swine production capacity has not yet recovered completely,” Shanghai-based agricultural consultancy JCI China told Platts in February.
Since late 2019, China has been quick to implement strict quarantine measures whenever an ASF outbreak is discovered. According to MARA, six ASF outbreaks were reported in China in 2020, with the last having occurred in October. All the six outbreaks were dealt with quick quarantine measures and stricter inter-provincial transportation policies, MARA said.
The ASF first emerged in China in August 2018, which resulted in the loss of over 50% of its swine population. Following large-scale quarantine measures, over 200 million pigs were culled that year, leading to a massive shortage of pork in the country and record pork prices.
China's pig farming sector has experienced a rapid consolidation since late 2019 as small-scale farms were amalgamated into big entities under a government directive and over $30 billion invested in the consolidation, a Beijing-based consultancy said.
Source:Platts
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