China corn industry also hit by African swine fever as demand for pig feed drops

China grew 257 million tonnes in 2018 or 40 per cent of the country’s overall grain production, comprising 7.8 per cent of gross domestic product

Private estimates show China’s pig population has dropped by as much as 60 per cent, while corn imports could also increase as part of US-China trade war deal

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The latest data from China’s agriculture ministry showed that as of the end of August, the country’s live pig population had fallen by 38.7 per cent from a year earlier. Photo: Reuters

Published: 6:15am, 17 Sep 2019Updated: 8:39am, 17 Sep 2019

Corn accounted for almost 8 per cent of China’s gross domestic product last year and 40 per cent of the country’s overall grain production, but one of the country’s three principle crops is feeling the effects of the African swine fever epidemic as demand for pig feed shrinks, according to industry insiders.

Along with wheat and rice, corn is one of the three principle crops in China, meaning the government will take steps to ensure the country’s self-sufficiency as part of its overarching food security policy.

The annual output of corn was the largest of all crops at 257 million tonnes last year, with the corn industry also an important part of the nation’s economy, contributing 7.8 per cent of China’s gross domestic product last year, according to Tong Yi, chief engineer at the China National Cereal, Oils and Foodstuffs Corporation, the largest state-owned food processor in China.

But the latest data from China’s agriculture ministry showed that as of the end of August, the country’s live pig population had fallen by 38.7 per cent from a year earlier. The number of sows had also shrank by 37.4 per cent, indicating fewer piglets will be born and the pig population will continue to shrink in the near term, and as a result, the demand for corn has and will decline sharply.

The situation might be far more serious [than the official figures suggest], according to our own data

Zhang Qirong

Feng Jilong, general manager at Dalian Northern International Grain Logistics, said that the impact of African swine fever on the corn market has proven to be far more powerful than previous estimates. At the beginning of the year, the estimate was that the pig population would fall by about 20 per cent, or only half of the real 40 per cent loss so far, Feng said.

Zhang Qirong, who is in charge of corn purchases at Twins Group, a Chinese feed producer, said that their own research has shown that China may lose 50 per cent, or even 60 per cent, of its pigs due to African swine fever.

“The situation might be far more serious [than the official figures suggest], according to our own data,” Zhang told the China Corn Industry Conference in the northern Chinese city of Dalian last week.