African swine fever: a global factor affecting agricultural markets over the medium term

The African swine fever (ASF) outbreak in the People's Republic of China (China) is affecting regional and global meat and feed markets with potential impacts on vegetable oils, biofuels and even pharmaceuticals. Using the Aglink-Cosimo modelling system, the authors adopt three different scenarios to assess the impacts of ASF in China, South-East Asia and the world. The simulation results show a range of possible effects for agricultural commodity markets, notably a large initial protein gap that will be filled by higher production of both eggs and non-pork meats (poultry, beef and sheep/goat) in China and by pork imports from international markets. The results suggest a fast and near complete closure of the protein gap, reflecting China's low responsiveness of meat demand to prices. A sizeable share of the protein gap could remain unfilled if the necessary import infrastructure for meat, with gapless cold chains and efficient and comprehensive sanitary controls, is not set up as assumed in the scenarios. Not filling the protein gap would also leave domestic meat prices at permanently high levels, which could even translate into higher overall inflation rates. The simulations further suggest that an ASF pandemic would drive a lasting wedge between plant protein and animal protein prices, both locally and internationally. Oil meal prices will be particularly adversely affected, whereas pork and poultry will see a significant price rise. Countries that import the former and export the latter are likely to become the main beneficiaries of an ASF pandemic, benefiting from lower input prices and higher output prices for potentially large volumes of exports.