Pork industry in China is now under observation following the first case of African swine fever reported in animal feed supplies. The major Chinese animal feed maker Tangrenshen Group said on Sunday that they had found the disease from the sample provided by its subsidiary, Bili Meiyingwei Nutrition Feedstuff. This discovery now raises fears as the disease might be spreading across the country.
This is the first case of contamination in animal feed supplies reported in China, increasing concerns among pig farmers who are trying to avoid African swine fever. The news raises concerns toward feed manufacturers struggling with slow demands and low margins as well.
The discovery occurred during an inspection following an outbreak of the disease at a pig farm in Anhui province, southeast China. Beijing said the cases in the province were likely caused by pigs being fed by kitchen wastes which were not processed properly to kill the virus. But, many industry experts already suspected animal feed supplies have been contaminated with the disease.
In a statement to the Shenzhen Stock Exchange, Tangrenshen Group said the origin of the contamination remains unknown and the case was still under investigation. Most of the income of Tangrenshen Group relies on animal feeds, wherein the sales in 2017 were 12.6 billion Yuan (US$1.81 billion).
Similar to other Chinese feed companies, Tangrenshen Group moved into pig processing and farming. In 2016, the company acquired Bili Meiyingwei (Shenzhen Premix INVE Nutrition) from INVE Belgium - a Belgian feed maker.
The company noted the impact on its operation was relatively small, in which the subsidiary only accounted for only 2.27 percent on the net profit of the company in the first nine months of 2018. And on Monday, the group's shares further fell from 6.6 percent to 4.56 Yuan (US$0.66).
Pan Chenjun, a senior analyst at Rabobank, said buyers might be worried in buying feeds from similar subsidiaries and major pig producers were also worried on how to verify whether their feed supplies were safe or not.
"If there's any contamination, it's very difficult to control," she further noted.
Meanwhile, China has been struggling to stop the rapid spread on African swine fever, now reaching almost the majority of the pig-farming regions in the country. Approximately 700 million pigs were being produced in China per year - almost half of the world's total. According to the South China Morning Post, there's no vaccine and cure for African swine fever and it can survive in feed ingredients for weeks, such as soy meal.
