In this file:


·         China, Tariffs and Pork Sales

·         China pork prices soar as herds hit by fever, farm closures

·         Here’s a “win-win” trade concession China can make to the US right now



China, Tariffs and Pork Sales


By Jerry Hagstrom, DTN Political Correspondent

via Ohio Country Journal - September 16, 2019


WASHINGTON (DTN) — While Friday’s announcement from China that it would suspend additional tariffs on U.S. pork is a good sign, China should remove the 60% punitive tariff it has placed on U.S. pork to ease its own rising pork prices and move along trade talks with the United States, National Pork Producers Council officials said.


If the Chinese government would do this, “It would help their citizens,” who are experiencing rising pork prices due to African swine fever, NPPC President David Herring, a Lillington, North Carolina producer, said at a briefing for reporters Thursday following an NPPC fly-in to Washington.


Early Friday, China announced it will suspend “additional tariffs” on pork, soybeans and other farm goods, Xinhua News Agency reported. Yet it is unclear exactly what level of tariffs Chinese officials committed to suspend, and the Associated Press reported phone calls to Chinese government agencies were not answered Friday because of a national holiday.


“If media reports are accurate, this is a most welcome development,” Herring said in a statement Friday.


Tariffs on U.S. pork increased another 10% on Sept. 1, making the retaliatory tariff 60%, tacked on to a traditional 12% duty already in place. That puts the full Chinese tariff on U.S. pork now at 72%. The inability of U.S. producers to export to China is costing pork producers $8 per animal sold, according to Dermot Hayes, an economist at Iowa State University.


With China forced to kill pigs to stop the spread of African swine fever and Chinese production down 50%, U.S. producers should benefit, but the tariffs make U.S. pork too expensive to import, said Nick Giordano, NPPC vice president and counsel for global government affairs.


U.S. pork producers are benefiting from rising world pork prices due to lower Chinese production, but the benefits would be so much greater if the U.S. industry could export to China, he said.


“Our sector is one of those most impacted by the trade disputes,” Giordano said.


Removing the tariff on U.S. pork, “Would be viewed favorably by our industry but, more importantly, by the U.S. government,” Giordano said.


Instead of exporting higher volumes in a period of Chinese shortages, American producers are watching their competitors in other countries make those sales, he added. Most U.S. competitors only pay a 12% duty selling into China.


China bought 237,800 metric tons of U.S. pork and variety meats from January through July of this year, according to USDA data, a 51% increase from low 2018 sales to China. In terms of volume, China is the second-largest market behind Mexico. Japan remains the top market for U.S. pork in terms of dollar value, while China is third behind Mexico.


Data published by the European Commission on the EU’s pork exports show that, during the first half of 2019, EU exports to China grew by 42%...





China pork prices soar as herds hit by fever, farm closures


Fu Ting, Associated Press

via New Haven Register (CT) - September 13, 2019


BEIJING (AP) — Chinese families are having to rethink menu options as pork prices soar despite government efforts to rebuild herds decimated by African swine fever and large-scale closures of pig farms for environmental reasons.


Liu Min, a 61-year-old retired cleaning lady, went ahead and bought a small chunk of pork that cost her 21 yuan ($3) during a recent visit to a local fresh market. That's nearly twice what it usually costs.


After all, you can't make "zhajiang" style noodles without pork to go into its heavy bean-based sauce, Liu said.


But pork is a big part of her diet, as it is for most Chinese, and the higher prices are pinching.


"This is having a huge effect on me, a huge one," she said.


Pork prices surged 46.7% in August from a year earlier, adding 1.08 percentage points to a 2.8% rise in the consumer price index. That's hitting Chinese families hard: pork accounts for more than 60% of their meat consumption.


"People complain pork is too expensive and buy less, so business is not going well," said Sun Tiantao, who sells pork in a market in Beijing.


China raises about half of the world's pigs, and the outbreaks of African swine fever that began over a year ago have ravaged its herds. The disease does not infect humans.


To boost pork production, the government announced this week that it will take steps to help revive hog production, prevent and control the disease and upgrade farms to further ensure pork supplies and stable prices.


That will take some doing: in August hog stocks dropped nearly 40% from a year earlier and nearly 10% from July, according to the Ministry of Agriculture and Rural Affairs.


The trend is unlikely to reverse anytime soon, and piglet prices had more than doubled from a year earlier to 52.93 yuan ($7.50) per kilogram as of last week, the ministry said.


That means the price of pork will be rising for at least another six months.


"It has to go up, because increasing supply is so difficult and the farmers are leaving, and they are not coming back," said Wang Dan, an analyst for the Economist Intelligence Unit.


The pork crisis has at least one advantage, Wang quipped, allowing China more "flexibility" in its trade talks with the U.S., since smaller herds mean less need to import soybeans for feed.


Human appetites are another question.


"Better to eat less pork," said a story last week in the state-owned newspaper Life Times...





Here’s a “win-win” trade concession China can make to the US right now


By Jane Li, Quartz 

September 17, 2019


If there is one thing that China’s leaders like, it’s a “win-win” deal.  As they prepare to go into trade talks with the US early next month, there’s one American product that truly falls into that category.


China’s hog prices have gone up 130% since January this year, according to Zhue, a Chinese industry website that tracks the country’s hog prices based on data collected from hog farmers and vendors. The surge in prices is due to an outbreak of African Swine Fever, a disease lethal to pigs but harmless for humans, that began in August last year. Farms have had to slaughter tens of millions of pigs to prevent the epidemic, leading China’s herd count to shrink by nearly one-third as of July, according to Reuters.


In August alone, the price of China’s most consumed meat went up nearly 50% in price in August. And prices are only predicted to go up further before the end of the year.


Pork is not only a food staple, but also a symbol of prosperity in China—which is currently marking the year of the pig, according to the Chinese zodiac. Already, there have been laments on Chinese social media platforms like Douyin about the increased pork prices, adding to the other economic pressures the ruling Communist Party faces—a steady supply of affordable pork is essential to maintain social stability.


While bad news for China’s consumers, the surging price of hogs could bode well for US hog farmers, who had been hoping ahead of the 2016 election to increase sales to China, even discussing adjusting the use of a feed additive banned in China to improve market share. But those hopes were dashed after Donald Trump’s took office. US pork, originally under 12% tariffs, has seen duties go to a total of 72% as Beijing imposed retaliatory measures in response to successive US tariffs from last July on Chinese goods. The latest increase was a bump of 10% at the start of this month.


China was the third largest export market for US pork in 2018, following Japan and Mexico. However, the volume of US pork exports in metric tons to China (including Hong Kong) last year saw a nearly 30% drop compared with 2017. The value of pork exports also declined to $852 million that year, from $1.1 billion in 2017, prior to the new Chinese tariffs, according to data from the US Meat Export Federation.


China has been grappling with how to contain the price increases, including importing more pork from countries like Brazil and Denmark, as well as tapping its emergency pork reserves. But the measures will not be enough, according to analysts. Lei Yi, analyst at China Merchants Securities, told Hong Kong-based newspaper the South China Morning Post that China has a “supply gap of over 10 million [metric tons]” of pork, while the country’s entire frozen pork reserves only amount to around 990,000 metric tons.


After the US said it would delay a tariff increase from Oct. 1 by two weeks because of China’s national celebrations, Beijing announced on Friday (Sept. 13) it will exempt some US agricultural goods (link in Chinese), including pork and soybeans, from additional tariffs. It hasn’t clarified whether goods will be exempted from the 10% tariffs imposed the month or see a deeper rollback—with a state-run news announcement on the exemption suggesting the exact amount could be a bargaining chip in upcoming talks...


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