China Cancels U.S. Pork Order; Trade War Drags On

Export Sales May 3-9 051719

It came as no surprise to many, but Chinese buyers dropped orders for 3,247 metric tons of U.S. pork, the biggest cancellation in more than a year, according to USDA data released Thursday. 

The cancellation took place the week of May 9, the same week that U.S. President Donald Trump announced increases on tariffs against Chinese goods. Reuters reported that this is a blow to the $6.5 billion export market for American pork, vital to the U.S. meat industry.

Before the trade war, China and Hong Kong combined were the second largest export market for U.S. pork. Unfortunately, the trade war and China’s tariffs against U.S. pork have resulted in a slowing of China’s willingness to load up on the meat, industry experts said. 

There’s no question the U.S. farm sector has taken a hard hit by the trade war. The U.S. pork industry has been banking on increased U.S. pork purchases from China as the country is looking at an expected deficit of up to 16 million metric tons by the end of 2019 due to massive losses from the deadly African swine fever (ASF) virus that impacts pigs, but is not harmful to humans or pose any food safety risks.

“China will need to expand its production of other proteins and ratchet up imports in an effort to fill the gap,” says Christine McCracken, RaboResearch senior animal protein analyst.

China previously canceled sales of 53 metric tons in the week ended Feb. 28, sales of 999 metric tons in the week ended March 21, and 214 metric tons in the week ended April 18, according to USDA data.

The cancellation news on Thursday weighed on the lean hog futures market, Reuters reported.

“It’s just disappointing that this trade war could drag on for months and that means more tariffs on pork,” says Dennis Smith, commodity broker with Archer Financial Services. “This should not be happening. We should be selling a lot of pork to China, because of ASF.”

ASF’s devastation of China’s pork supply is boosting prices and sparking demand for shipments of meat from abroad. Australian beef exports to China could hit a new record this year, says Pro Farmer analyst Jim Wiesemeyer. 

The China Animal Agriculture Association described ASF as a national crisis this week that needs more government assistance.

For more on ASF in China, visit porkbusiness.com/ASF.


Related Articles:
Will African Swine Fever Push Consumers to Alternative Proteins?

African Swine Fever Losses Cause Export Challenges, Opportunities

 
Comments