Shangai Stock Exchange – Photo: Bloomberg

It has been years since the first appearance of the African Swine Fever, a lethal virus that strikes hogs with an almost 100% rate of fatality. However, in 2019, ironically the Year of the Pig in China, the number of cases has drastically increased. But what is it all about?

The virus

Quoting the World Organization for Animal Health, the “African swine fever (ASF) is a highly contagious haemorrhagic viral disease of domestic and wild pigs”. Despite being totally harmless for human beings, it is rapidly spreading from Africa to Asia and Europe. The ASF can be transmitted mainly by physically coming into contact with other infected pigs or contaminated clothing and equipment bore by humans. Another serious concern comes from the wild boars migrating across countries, thus spreading the disease. The ASF has spread to countries like Vietnam and Cambodia, but also Russia and Romania. Furthermore, there still doesn’t exist a vaccine to defeat or stop this virus, which can survive up to 6 months inside the carcasses of the infected animals.

The struck on China’s economy

China is one of the biggest pork meat consumers in the world: roughly 1 billion people include it in their daily diet. This also represents the most important source of proteins for poor citizens. The Chinese Government has recently stated that almost 55,9 million pigs have either died or been put down to contain the ASF. Realistically, the number of fatalities is probably closer to 100 million, but an exact figure is unlikely to be released due to the shadowy nature and secrecy of the Chinese Government. These incredibly alarming numbers are causing a continuous increase in the price of the meat: in China this phenomenon is being called “PorkFlation”, described by a curve showing the level of prices for pork meat, which has increased by roughly 20% during the last couple of weeks, from 12,11 to 15.05 yuan per kg. The meat imports followed a similar trend.

A graph showing the level of import of Pork Meat in China – Copyright 2019 Bloomberg Finance L.P.

The role of Italy

Recently there has been a lot of talk about China’s new infrastructure plan, dubbed the “New Silk Road”, and how it could increase Italian exports. Consequently, this would also promote Made-in-Italy products around the world. Because of this, China is hoping that Italy will provide frozen pork meat to contain the drastic increase in prices. This would be a far better solution for China, as it is currently being forced to import meat from the USA, paying a 62% tariff recently imposed as the result of the ongoing trade war.

The risk of a global food crisis

Apart from the worrying increase in the level of prices, the main problem of this crisis lays in the fact that China is the world leader in the Hogs Market. Statistically speaking, there are 430 million pigs in China, more than anywhere else (e.g. in the US there are “only” 74,3 million pigs). Such a drastic wipe-out could soon affect every nation, possibly causing a general food crisis in many different markets and sectors of the economy. Luckily, researches and scientists all over the world believe that they are close to finding a medical solution to the outbreak.

 

By Giulio Martirano