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Concern about corn demand grow as African swine fever enters South Korea

New Delhi — Concerns over the level of demand for corn in South Korea have been growing since the arrival of African swine fever, even though the country is well prepared to deal with the outbreak, trading sources said.

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"South Korean corn buyers have covered the majority of their demand for prompt month shipments and, with the continuous impact from the African swine fever, it is just not the right moment for South Koreans to start purchasing corn again," one trader said.

So far, South Korea's demand for corn has not been impacted, as only 1% of the country's 11 million pigs have been culled, according to trading sources.

South Korea's pork industry is a major consumer of corn and the country is the largest importer in Asia after Japan. It was expected to import about 10.5 million mt of corn in 2019-2020 (October-September), according to the US Department of Agriculture's Foreign Agricultural Service.

South Korea -- expected to produce about 1.4 million mt of pork in 2019, according to the USDA -- is the latest country to be hit by ASF. Many Southeast Asian countries and China have seen millions of pigs culled or die following outbreaks of the disease which affects pigs and wild boars.

Corn and soybean feed demand has taken a hit in China, one of the largest grain consumers in the world, due to declining hog population following the ASF outbreak.

Containing ASF a challenge

China and Vietnam, the two countries hit most by ASF, have struggled to control the disease as more than 50% of hog farms are owned by small farmers.

"The ability of South Korea's veterinary service to respond is much better than that of China or Vietnam, because of the smaller size of the country. It has much fewer small farms with poor biosecurity and, overall, the pork food system is better managed by the pig industry and the South Korean veterinary authorities than is the case in China/Vietnam," said Dirk U. Pfeiffer, a professor at Hong Kong's City University's Department of Infectious Diseases and Public Health.

Even as experts agree that South Korea has good biosecurity measures, the chances of a situation like China or Vietnam emerging in the country cannot be ruled out.

While South Korea has better systems in place to help regionalize and limit the spread of ASF compared with China, it will still be a challenge, Arlan Suderman, chief commodities economist with INTL FCStone, said.

"The likelihood of the disease spreading will continue just as it has in China and Vietnam, because South Korea's...hog industry is not 100% commercialized," said Adam J. Speck, senior commodity analyst with IHS Markit, adding there was the possibility some people might try to circumvent health standards and protocols for transporting hogs and handling meat.

Humans were the biggest spreaders of the disease, carrying the virus from place to place unintentionally. Contaminated animal feed was another major spreader of the virus, and it was not always possible to detect the virus in contaminated animal feed, Speck said.

Buying animal feed from verified ASF free zones will be critical if South Korea is going to curtail the disease, analysts said.

As the world grapples with ASF, industry players have accepted the disease is here to stay for some time and are gearing up to support feed meal demand through the poultry sector.

The poultry as well as aquaculture sector are replacing some or nearly all of the lost demand for swine feed, thus keeping overall feed and feed grain demand even, according to the US Grains Council.

"Our staffs in Southeast Asia in particular are working closely with industry as they make the shift in their production strategies and to help them recover as quickly as possible, which will be an important contribution to feed grain demand as well as local protein availability," the council said.

-- Staff, newsdesk@spglobal.com

-- Edited by Dan Lalor, daniel.lalor@spglobal.com