By Jonathan Martin
Chinese pork prices will top their 2016 record high by as early as the end of 2019, Chinese brokerages predict. The rise in prices indicates a lack of supply, which is good news for North American producers, whose herds could fill the gap left by the estimated 20 per cent reduction in 2019 Asian swine numbers.
African swine fever (ASF) will shrink China’s herd size by 134 million head, the U.S. Department of Agriculture predicts.
“We’ve been having a rallying in lean hog futures since March 2019 because of hope that a lot of the export business would come to the U.S.,” Abhinesh Gopal, commodities research specialist with Farms.com Risk Management, told Farms.com. “You have the demand pull because of ASF but the pressure of the U.S.-China trade war.”
China-bound shipments of American hogs are being booked in the hope that a trade deal will be signed down the road, Gopal said.
“We need to remember that U.S. shipments are being subjected to a 62 percent tariff, so there aren’t that many shipments being sent out right now,” he told Farms.com. “Booked is booked, though, so they’ll likely go out eventually.”
This year, Chinese beef imports surged 75 per cent from a year earlier in April, the South China Morning Post reports. The article did not indicate the shipments’ points of origin.
U.S. President Donald Trump has repeatedly said he is getting ready to meet Chinese President Xi Jinping at the G20 summit, to be held in Osaka, Japan, at the end of June. China has not yet confirmed the meeting.
As the summit approaches, Trump is preparing to launch another round of 25 percent tariffs on virtually all Chinese imports so far untouched by the two countries’ tariff war. The move would apply to a US$300-billion list of goods including cellphones, computers and clothing.
Trump will decide whether or not to impose the tariffs after he meets with Jinping, he told Reuters Monday. If Trump’s Chinese counterpart refuses to meet, the tariffs will go into effect immediately, the U.S. president said.