Cranswick to see benefits from outbreak of swine fever in China

Upmarket food producer Cranswick should benefit from the outbreak of African Swine Fever in China, which has led to the culling of millions of Chinese pigs.

The Far East has been hit by the serious outbreak of African Swine Fever
The Far East has been hit by the serious outbreak of African Swine Fever

Leading analyst Clive Black at Shore Capital said that the deterioration in the African Swine Fever position in China could beneficially influence Hull-based Cranswick s 2022 financial results. Cranswick is the UK’s leading pig processor with over 30 per cent self-sufficiency.

Mr Black said: "Assuming that the UK remains a bio-secure space from an African Swine Fever perspective, something that the British authorities need to be exceptionally diligent about, we can foresee Cranswick and other exporters from these isles continuing to benefit from elevated demand and attractive margin."

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Cranswick has previously said that export sales have been exceptionally strong as the outbreak of African Swine Fever has created opportunities for Far Eastern exports.

The firm said the Far East has been hit by the serious outbreak of African Swine Fever, leaving a space for British companies to fill the void.

However, the UK will need to stay free of the deadly virus.

“The UK industry remains on high alert with intensive biosecurity protocols in place,” the firm said.

Figures show that Chinese pork production had fallen to a 16-year low after a major swine fever outbreak in the country. The outbreak, and a subsequent rise in meat prices, has caused inflation to soar in the world’s largest pork market.

Mr Black said: "African Swine Fever has been perhaps the key front and centre matter influencing the direction of travel of the global pig market in recent years, most specifically in China where a herd of around 450 million pigs contracted through 2018/19 to around 250 million animals presently.

"In response, the necessary cull of the Chinese herd has been a massive exercise, a most disturbing and heart-breaking one, but its success or otherwise remains the most likely factor determining global markets in the future, in our view."

He said that the British pig and processing industry should see stronger demand for pork from China as a consequence.

He said this increased demand "should be particularly helpful in light of the tough comparatives facing the domestic industry as a result of elevated trade as a result of the coronavirus pandemic, noting weaker farm-gate prices in recent times too".

Cranswick is expected to announce its preliminary results on May 18.