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Chinese hog farms 'panic' as swine virus shrinks herds

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If China's domestic hog supplies fall by 10 per cent, the country would need to import more than two million tons of pork, said an agri-science researcher.

Beijing

MOST Chinese hog farms are choosing not to replenish herds as a deadly swine virus continues to spread across the world's top pork market.

More than 80 per cent of farms are deciding not to restock, said China's Agriculture Ministry. Outbreaks of African swine fever were confirmed on Sunday on six farms in Hainan, in China's south. The virus has spread across the entire country since it was first reported in August, and more than a million hogs have been culled.

"There has never been such panic among farms," said Wang Junxun, deputy director at the Agriculture Ministry's bureau of animal husbandry and veterinary services, at a conference in Beijing over the weekend.

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China, which produces about half the world's pork, has seen its biggest drop in the number of hogs over the past few months, said Mr Wang.

The country's productive sow herds slumped 21 per cent on year in March after a 19 per cent drop in February, ministry data showed. As well as leading to a surge in pork prices, the epidemic could also cut demand for soybeans, an animal feed ingredient, of which China is the world's largest importer. (Crushing soybeans produces soymeal for the animals.)

Lack of bio-security measures at many small farms, coupled with a large number of live hogs being transported long distances, are to blame for the spread of the disease, said Mr Wang.

China's soybean imports in the year to September may fall to about 85 million tons, said Chen Gang, vice-chairman of the China Vegetable Oil Industry Association; the amount is below the US Department of Agriculture's 88 million ton forecast.

The decline in the pig herd will lower demand for soymeal for the first time in years, said Mr Chen, whose association oversees the major crushers, including those run by state-owned Cofco.

Mr Wang said: "If confidence among breeders fails to recover, it will hurt consumers. Pork supplies could start to tighten and prices will hit record levels in the second half of the year and then tighten further next year, he said.

Chinese people are pork addicts, with the product accounting for more than 60 per cent of meat consumption. Their enjoyment of this meat is putting the heat on the authorities to ensure that there will be sufficient supplies, said Mr Wang.

While increasing imports could narrow the shortfall, global trade volume may not be enough to fill China's supply gap, said Mr Zhu Zengyong, a researcher at the Chinese Academy of Agricultural Sciences at the Agricultural Information Institute.

Should China's domestic hog supplies fall by 10 per cent, the country would need to import more than two million tons of pork, he said at the Beijing conference. Globally, the annual pork trade produces nine million tons.

There are, of course, other meats. China's poultry expansion is looking constrained because of the drop in imports of genetic breeding stock, said Mr Zhu. China's chicken meat output may rise 2.4 per cent this year on year, but consumption may rise 2.6 per cent, going by the Agriculture Ministry's outlook data. BLOOMBERG