Global supplies of pork are under pressure on several fronts. Russia has banned pork imports from the European Union after recent outbreaks of African swine fever, while the spread of PEDv in the US, Mexico, Japan and South Korea will likely lead to a decline in global pork production in 2014, Rabobank noted.
“PEDv has been the driving force pushing up pork prices, especially in the US, to record highs,” said Albert Vernooij, Rabobank analyst. “US futures climbed 30 percent in Q1 and are up 45 percent over last year, impacting pork users and consumer’s ability to source enough pork for their needs.”
Meanwhile, pork prices in Russia sharply increased since the country banned pork imports from the EU following an outbreak of ASF in wild boars in Poland and Lithuania. Pork imports from the EU account for roughly one-third of Russia's total import volume in 2013, according to Rabobank. But as PEDv continues to spread through North American hog herds, Russia will have few alternatives to fill the void left by the EU.
A bright spot in Rabobank's outlook for the global pork market is China, where high sow liquidation in has created an oversupply of pork that is easing stress on global pork supplies, Rabobank reported.
“In China, pork consumption is expected to remain steady in 2014, as hog supply will continue to be at a relatively sufficient level,” Vernooij said.
Rabobank expects pork prices in China will continue to fall in Q2 and into Q3 2014. Continued sow liquidation, which began in April, should help Chinese pork prices recover by the end of Q3 2014 in line with the seasonal increase of China’s pork consumption.