Mexico opens the gate for more EU pork, put tariffs on US products
Hog contracts on Chicago Mercantile Exchange (CMS) closed lower on Thursday after the shock wave transmitted by Mexico's announcement about 20% tariffs on US pork was felt since Wednesday.
Mexico's economy minister said that country will import more pork from Europe after placing a 20% duty on U.S. pork in response to Washington's higher tariffs on Mexican steel and aluminium.
"Trade issues are hanging over the market. Without that influence we'd have the July contract at 85 cents per pound," said Allendale Inc. chief strategist Rich Nelson, according to Reuters.
June hogs, which will expire on June 14, closed up 0.425 cent per pound at 78.575 cents. Most actively-traded July ended 0.500 cent lower at 79.450 cents. August finished 1.200 cents lower at 76.425 cents.
Another opinion expressed Wednesday by Jim Long in a Genesus Global Market Report shows that, for a while, hog producers can expect a harsh time due to political battles that are going on between USA and Mexico, China and Canada.
"I have stated before that even with the extra packing capacity we still have to sell the meat. Exports are going to have to get us through this and we cannot stand a long-term dispute with our trading partners. In the long term, I think this will all get resolved but that does not mean we won’t be feeling the brunt of this battle in the short term", said the President/CEO of Genesus.
At this moment, along with Japan and Hong Kong, Mexico, China and Canada are the nations that receive 25% of the US pork exports, even if every market is oriented to different parts: hams in Mexico, variety meats in China and Canada and loins in Japan.
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