Killer Pork Virus Spreading in China

Caixin: China May Face Wider Pork Bans as Deadly Pig Virus Spreads
The Food and Agriculture Organization, the United Nations agency spearheading an international effort to control the deadly pig virus, plans to release recommendations for governments after a crisis meeting in Bangkok this week. The Philippines last week ordered a temporary prohibition on pigs and pig-related products from China, Russia and four European countries to prevent African swine fever. More nations may follow, according to the FAO.

...Nine other outbreaks have been reported across northeastern and eastern China, spanning some 2,500 kilometers, since Aug. 1.

“There are serious concerns that African swine fever has been circulating in the pig population — whether backyard, commercial or wild boar — for some time,” Helen Roberts and Jonathan Smith, from the U.K.’s Animal and Plant Health Agency, wrote in an Aug. 31 report.

...Travelers from Henan province arriving in South Korea voluntarily handed over pig products that were subsequently tested and found by authorities to harbor traces of the virus, the Korea Times reported on its website last month.
Pork is an important factor in the Chinese CPI. It's also a major source of soybean demand.

SCMP: Why China’s pork producers can survive without US soybean imports
But by using countermeasures such as Li’s, as well as increasing imports from other countries, encouraging domestic planting of the crop and other administrative interventions, China might help its farmers absorb the shock, analysts said.

Ma Wenfeng, an analyst from Beijing Orient Agribusiness Consultant, said China had been importing far more soybeans than it really needed and could do without US imports in the short run.
A major pig virus would also help with short-term demand, though it will send pork prices far higher than the pass-through cost of soybean tariffs.

FT: The China pig put
Almost all soybean farmers enrolled in the subsidised insurance policy and declined the subsidised price put. Again, the demand from China made US soybeans the perfect product. Why buy price protection when the market is too pig to fail? So soybean farmers chose subsidised protection from the elements. This year they needed subsidised protection from the market.

Now we know, of course, that US soybean farmers needed a China pig put. And they will get one. It's not yet clear what structure it will take, but the scale of the promised amount is... well it's significant. Compared to the US budget, $12 billion doesn't sound like that much money. But in 2016 soybean farmers got $200 million in Agriculture Risk Coverage. The total that year, for the entire country, for both programs, for all crops: $6.9 billion.

The new federal program for farmers is massive. It also seems panicked, because even if every soybean farmer in America had chosen the price protection put, the post-tariff market hasn't even hit the strike price. Right now, support kicks in when the year-long average drops below $8.40 per bushel of soybeans. The July USDA forecast, which includes effects from the tariffs, says that other importers are taking advantage of lower US prices and predicts a year-long average between $8.00 and $10.50 per bushel.
Soybeans may have double-bottomed in July and September.
Bloomberg: China to Reimburse Tariffs for State Reserve Soybeans
China will reimburse the buyer for the cost of the 25 percent tariff on soybean imports from the U.S. if the cargoes are for state reserves, according to people familiar with the matter.
A lot of soybean imports will be going into state reserves this year, to replenish the soybeans taken out of reserves.

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