China’s pig ‘Ebola’ outbreak 'will move markets, influence geopolitics' for years to come

A minor outbreak of African swine fever among some 400 pigs in Shenyang in northeastern China is now threatening the global food supply chain and may increase pork prices for years.

Despite a mass cull, a blockade to prevent any further transmission and a government declaration that the outbreak of the particularly nasty strain of swine fever had been “effectively controlled,” China, the country with half of the world’s pigs, failed to stop the spread of the disease in time. Domestically, this contagion is already massive: China has a $128 billion pork industry and is third-highest global consumer of pork.  

In the truest sense of the word, the outbreak has already gone viral, spreading to Mongolia, Vietnam, Cambodia and farther afield. The strain of African swine fever kills virtually every pig it infects with a bloody death reminiscent of Ebola, although it is not known to infect humans.

“It’s the biggest thing to affect the animal-protein market this year, and will probably have a lasting effect for a number of years,”said Angus Gidley-Baird, a commodities analyst with Rabobank in Sydney. “It will move markets and possibly influence geopolitical situations.”

Official estimates in China count one million culled pigs so far but many expect 100 times that number will be eradicated in 2019. The US Department of Agriculture is predicting a decline of 134 million animals from Chinese hog populations, equivalent to almost one-and-a-half times the entire US inventory of 75 million pigs.

Effects have already been seen on the other side of the globe. The price of bacon in Spain already jumped 20 percent in March owing to increased Chinese demand, while wholesale pork prices in China are reportedly up 19 percent from 2018 levels, and rising.

“If I really like bacon, I’d be kind of stocking up,” says Steve Meyer, an industry economist with Kerns & Associates in Iowa, as cited by CNBC.

The US-China trade war already includes retaliatory tariffs amounting to an effective 60 percent import tax on American pork coming into China. 2019 is the Chinese zodiac’s year of the pig, but it may prove to be much more ominous than auspicious.

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