China, the world’s largest pork consuming country previously faced shortages due to the occurrence of the African Swine Fever (ASF), the coronavirus outbreak is further aggravating the market situation. The low domestic supply has been exacerbated by the coronavirus, as roadblocks and lockdowns disrupted the flow of the meat to consumers. Furthermore, the launch of new pig breeding facilities has been delayed by the epidemic. With regards to imports, there are reports that pork shipments from the US to China have been delayed as a result of slower unloading of the meat at ports. As a result, the Mintec Chinese pork prices skyrocketed at 167% y-o-y and 11% m-o-m in the first week of February.
Additionally, according to the USDA, Chinese imports are forecast to be up 42% y-o-y in 2020 as a result of shrinking domestic production. Therefore, interruption in the revival of the pork industry due to the coronavirus coupled with higher reliance on imports is likely to result in firmer pork prices in 2020.
Apart from pork, chicken is the other meat impacted by the coronavirus. US and China recently signed a phase-one agreement, putting a halt to the prolonged trade war. China has been a lucrative market for US chicken, and the recent revocation of tariffs indicated positive signs of trade between these two giants. However, ships carrying refrigerated cargo containers of chicken from the US to mainland China are being diverted to ports in Hong Kong, South Korea, Taiwan and Vietnam which may cause delays and result in lower exports from the US to China. There’s currently no evidence that this has impacted US prices because of the interruption to trade. However, if the disruption continues, the US chicken prices are expected to fall in the short term. Furthermore, Chinese chicken prices are currently falling on the back of poor domestic demand and the outbreak of the deadly H5N1 bird flu.