African Swine Fever Outbreak in Belgium Creates Concern Over Further Spread
A recent African Swine Fever outbreak in Belgium is setting off alarm bells among Europe’s pork industry. If the disease is successfully contained in the municipality of Étalle in southern Belgium, the impact of this outbreak will be limited. Thirteen countries have already imposed a ban on Belgian pork exports. We expect it to take at least six months before Belgian pork processors can regain access to these important export markets. If African Swine Fever spreads to Germany, the Netherlands, or France, then the impact will be more severe, disrupting world pork trade.
Rigorous approach to prevent further spread
On 13 September 2018, the Belgian government announced that African Swine Fever (ASF) had been detected in wild boars. The outbreak was recorded in the municipality of Étalle, 15 kilometres from the French border, 50 kilometres from Germany, and 150 kilometres from the Netherlands. The source of the contamination is not yet known, but human activity seems the most likely candidate.
The Belgian authorities have announced measures to prevent the spread of ASF. A safety zone has been put in place, stretching 63,000 hectares, running 45 kilometres from east to west and 30 kilometres from north to south, with Étalle in the centre (see figure above). In this zone, animal transport and human activities are either prohibited (as is the case for hunting and recreational activities) or greatly reduced (in case of forestry). The demarcated area borders on France in the south and Luxembourg in the east.
The Belgian government has decided to slaughter all 4,000 commercial pigs located in this low-density pig area, for prevention reasons. If no commercially farmed pigs are infected, Belgium can maintain the status ‘Officially free of ASF’, ensuring that the national export certificate remains in place. Otherwise, a diplomatic procedure must be restarted to obtain the export certificate.
ASF has already affected Belgium’s exports
Since the outbreak, twelve countries have banned pork imports from Belgium: China, South Korea, Taiwan, the Philippines, Belarus, Mexico, South Africa, Japan, Malaysia, Singapore, Uruguay, and Australia. Russia has ceased pork imports from all EU countries since 2014. Some markets reopen at the earliest six months after the last reported case, but others could wait years. The recovery of these markets will also take time and resources to rebuild relationships and confidence. Access to these markets is important for the optimal valuation of pig carcasses, as by-products are sold at the best prices in Asia.
Belgian companies are allowed to continue exports to EU member states and to non-EU countries that accept the regionalisation principle, which means that the Belgian trade of animals and meat from outside the closed safety zone is allowed.
Belgian further processors and retailers combined import more than 300,000 tonnes product weight every year. These volumes may decrease, depending on domestic demand, the course of exports within the EU, and the price level in Belgium compared to surrounding countries.
Immediately after the outbreak, the Belgian pig price was under pressure. Because the sanitary situation remains under control, the price has quickly normalised compared to other countries. Of course, international companies use ‘the ASF risk’ to keep lower prices.
For the whole of the EU, prevention and bio-security are key to avoid ASF spreading further. Pig farms must continue to expand their biosecurity, and animal transport must comply with stricter hygiene rules.
Greater impact if ASF spreads to Germany, Spain, Denmark, or the Netherlands
The ASF outbreak in Belgium shows that the disease can spread elsewhere in Europe through negligence. If ASF spreads to a commercial pork production area elsewhere in Belgium or in another EU country, the impact will be significantly greater.
Belgium is strongly focused on exports (941,800 tonnes product weight in 2017). But less than 10% of these exports was sold outside the EU, with China/Hong Kong and the Philippines being the most important destinations. In fact, Belgium accounts for only 2.5% of total EU exports.
A potential ASF outbreak in Germany, Spain, Denmark, or the Netherlands would disrupt the balance in EU supply and demand. If, for example, the Netherlands experiences an ASF outbreak and a subsequent trade ban, 433.000 tonnes of meat that is currently exported outside the EU would come onto the European market. It would be difficult for other EU countries to compensate for the absence of this large export volume (see Figure 2).
Figure 2: Belgium ranks tenth among EU exporters, contributing only 2.5% to total EU exports, 2017
If the level of total EU exports can’t be maintained, it will have an immediate effect on the pig price due to oversupply of the EU market. This will trigger a decrease in production in order to find a new balance between supply and demand.
The live trade of piglets and fattening pigs between the Netherlands, Denmark, and Germany, which concerns more than 15m animals, could be halted partly or completely if borders were to be closed by an ASF outbreak. In this case, the question must be asked where Danish and Dutch piglets could be sold, because both countries have no place to fatten them themselves.
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Jan Peter van FerneijSenior Analyst – Animal Protein Read more
RaboResearch Food & AgribusinessPO Box 17100 (UC 053) 3500 HG Utrecht, The Netherlands