[Singapore 27th Reuters]-For US grain exporters in the face of a trade war with China, last year the purchase of feed by livestock farmers in Southeast Asia was the lifeline. Now, however, African swine fever cholera attacks Southeast Asia, and there is a risk that it will have a fatal impact not only on pigs that feed on US grains but also on grain exports from the United States.
Exports of US cereals to countries such as Vietnam, Myanmar and the Philippines increased by nearly 50% last year, reaching a record 12.3 million tons. The impact of a sharp drop in exports to China by about a quarter has been mitigated by these moves.
However, exports to Southeast Asia lost due to African swine fever are likely to be enormous, and US livestock farmers will have to stock up unless the US-China trade agreement is concluded.
“In the Philippines, pig production will fall, and like other countries, demand for feed will decline,” said Edwin Chen, Philippine Pork Production Federation.
The Philippines is the world's fourth largest importer of soybean meal, but since the spread of African swine fever, demand for feed grains has already begun to slow.
African swine fever is not contagious to humans, but it is a contagious disease that kills pigs and there is no vaccine. According to the World Animal Health Organization, it was confirmed in China as the first case in Asia more than a year ago and now has spread to more than 50 countries. This includes countries that account for 75% of the world's pork production.
<Efforts to gain share>
In Southeast Asia, corn and soybean imports have increased by nearly 25% over the past five years, and have become the world's third largest import market for both grains. For this reason, the sharp drop in demand in the region is particularly alarming for exporting countries.
Competition has intensified against the background of the rapid expansion of the market, and exporters' organizations regularly send delegations to gain market share.
One such organization, the US Soybean Export Council (USSEC), has developed a “do the necessary means” strategy to at least partially offset the decline in exports to China and promoted US grains throughout Southeast Asia. Yes.
“For USSEC, market diversification has been the most important issue since years before the US-China trade problem,” said Rosalind Leigh, USSEC North Asia Regional Director.
Efforts paid off, and in 2018, US grain and soybean exports to Southeast Asia reached the highest growth rate ever, surpassing that of China for the first time.
<Infection spread>
There is a fear that this struggling and secured growth is now reversed by African pig cholera. If the number of pigs decreases, the import of feed grain will also decrease.
According to two trading company sources, this year, the purchase of corn and soybean meal will be reduced by about 1 million tons in Vietnam alone.
Vietnam, the world's sixth-largest pork producer, has already killed about 4.7 million heads after the spread of African swine fever. Since the first infection was confirmed in February, by the end of July, the number of pigs in the country decreased by 18.5% to 22.2 million.
Thailand, the world's fifth largest importer of soybean meal, has killed two pigs this month in a province near the Myanmar border where African swine cholera has been confirmed. did.
An industry expert said, “Infection has spread to Vietnam, the Philippines, and South Korea. Bad news continues for US feed grain farmers and Asian livestock farmers.”
(Naveen Thukral reporter Gavin Maguire reporter)
