BEIJING (Reuters) – China’s three-month old outbreak of African swine fever has spread for the first time to the country’s south, its major pork-consuming region, signaling how deeply the deadly disease has permeated the country’s pig herd, the world’s largest.

Two new cases reported in the southwestern province of Yunnan on Sunday came as China enters its peak pig production period ahead of the country’s most important festival, the New Year holiday, which will be held in early February 2019.

“The thing that we worried about the most has now happened,” said Feng Yonghui, chief analyst at industry portal, referring to the spread of disease from northeast to southwest.

China has reported more than 40 outbreaks of the highly contagious disease in 11 provinces and municipalities, culling an estimated 200,000 pigs. All outbreaks had been in the north and eastern provinces until the first case in Yunnan.

The latest outbreaks, first reported by the official CCTV, were on two small farms in Zhaotong, a city in the northeast of Yunnan. On Monday, another outbreak was reported in eastern Zhejiang province.

Zhaotong is located almost 3,000 km (1,865 miles) from the city of Shenyang in the northeastern province of Liaoning where the first outbreak was reported in early August.

“Now there’s only some provinces that haven’t confirmed any cases but it’s very unlikely that they will be clean. Basically, it’s already everywhere,” said Pan Chenjun, a senior analyst at Rabobank.

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A total of 545 pigs had already died on the two farms in Zhaotong when the disease was confirmed. Almost 7,000 pigs in the 3-km (1.9 miles) area around the farms will be culled by midday on Monday, the website of state media Yunnan Daily said on Monday.

The cases in the southwest could have a major impact on the pork market, warned analysts, as the region both produces and consumes the most pork in China.

“In the southwest, everyone eats pork, no matter what their income level is,” said Feng.

Sichuan province, which borders Yunnan, is China’s biggest pig-farming region, slaughtering 69 million pigs in 2016, according to official data. The Guangxi region, also next to Yunnan, produced 33 million pigs in 2016 and has expanded output.

People in Sichuan eat 68 kg (150 pounds) of pork per person per year, according to research by Rabobank. That compares with just 20 kg in Shanxi province in northern China.

If China bans the transport of pigs from Yunnan and its neighboring provinces, as it has after outbreaks in the northern provinces, supplies in the south will likely plummet.

Transport restrictions would be the “worst scenario”, said Rabbobank’s Pan, noting that Guangxi is a key supplier to Guangdong, China’s most populous province.

Beijing has still not said how the disease first entered the country.

With only a few months until the peak pork consumption period of the Lunar New Year holiday, China’s agriculture ministry warned on Friday that pig prices will rise ahead of the festival because of the outbreak.

Because of the pig transport bans, supply trapped in the north cannot meet the demand in the south, causing distortions in prices. The price of a pig in eastern Zhejiang province rose to 20 yuan ($2.88) per kg earlier this month while in Liaoning prices dropped to 10 yuan per kg.

Prices in Yunnan fell 0.3 yuan on Monday to 14.7 yuan per kg, according to data gathered by China-America Commodity Data Analytics Inc.

($1 = 6.9350 Chinese yuan renminbi)

(Reporting by Hallie Gu, Dominique Patton and Beijing Monitoring Desk; Editing by Richard Pullin and Christian Schmollinger)