ASF could cost China up to $120 billion, claims Asian Development Bank
13:00 PM | October 22, 2020 | Max Green
China will lose $50-120 billion as a result of African swine fever (ASF) outbreaks and related culls, according to the Asian Development Bank (ADB).
An additional $5-10bn could be lost in countries such as Vietnam and Cambodia – taking total losses in the Greater Mekong region to as much as $130bn.
Of the total potential $130bn impact, $28-46bn is attributed to initial losses to disease and culls. To restore the breeder herd to levels necessary to meet the estimated pre-ASF demand of 55 million tons of pork per year, 11-12 million head would need to be diverted from the market into the breeding herd.
At an average price of approximately $175 per head, the estimated direct cost of replacements is $4-7bn. In addition, the loss of litters over a minimum of one year is an additional $23-77bn in revenues forgone.
The ADB's estimates do not account for losses in countries such as Indonesia, South Korea and the Philippines, all of which have also been hit by ASF. Nor do they account for indirect costs to the animal feed industry and other allied industries, such as animal and pork traders, slaughterers and animal health workers.
The bank said the burden of the disease is falling disproportionately on smallholders. As pig raising is often a critical livelihood mechanism, this is threatening increases in poverty, vulnerability and food insecurity.
The limited ability of smallholders to employ adequate biosecurity measures presents increased risks to neighboring herds. It has been estimated that introducing the biosecurity measures needed to prevent ASF incursion into large commercial operations in China costs about $6 per pig, while the costs for small farms may be as high as $30 per pig.
Exacerbating this, the supply side shock is driving up pork, other food and general prices for consumers. The report stated the effects of the disease on human health security, trade, the climate, climate change resilience and local environments are also substantial.
The ADB concluded: "The ASF epidemic highlights the massive economic and human costs associated with it and the potential costs of other animal disease outbreaks in the future. There is an urgent need for regional investment in animal health system infrastructure, capacity building, and policy to reduce the likelihood and costs of current and future animal diseases and zoonoses."
The ADB report on the impact of ASF can be found in full here.
Max Green is an analyst for IHS Markit Food and Agricultural Commodities.