US agricultural exports to China to double in a short time
The first step in a trade deal between the US and China was presented last week and could speed up pork and beef exports in the Asian country, according to analysts and Washington officials. "They're ... going to double our exports to China," National Economic Council Director Larry Kudlow mentioned in an interview for Fox television.
Under the trade agreement announced last week, Washington will reduce some tariffs on Chinese imports in exchange for Chinese purchases of agricultural, manufactured and energy products increasing by about $20 billion over the next two years.
While U.S. officials have touted the deal, Chinese officials have been more cautious, emphasizing that the trade dispute has not been completely settled. US Trade Representative Robert Lighthizer mentioned that a date for senior US and Chinese officials' signing of the accord has not yet been determined.
Nevertheless, the shortage of animal protein in the Chinese market leads to the idea of higher volumes of pork and beef imported from the US, with a special focus on pork. In the last four weeks, the volume of US pork exports to China was of 54,000 tonnes, despite tariffs ranging up to 70%.
"This is almost 3 times the level of 4-weeks pork exports to China averaged in the first 6 months of 2019. Year to date US exports to China are 316,000 tonnes, up 1236% over 2018. We expect as JBS and Tyson get Ractopamine free in January, that weekly exports to China could surpass 20,000 tonnes a week, equal to about 200,000 hogs in equivalency. We expect Canada to return to the export levels it had prior to the June China ban. That would be another 10,000 tonnes a week to China. Combined U.S. and Canada - 30,000 tonnes a week (300,000 hogs equivalency per week? Big number and would be approaching 15-20% of total U.S./Canada pork slaughter equivalency," said Jim Long, President and CEO, Genesus Inc.
Due to the ASF situation in China, the national swine inventory has dropped by 50%. A further decline is expected in 2020 creating a larger deficit of animal protein in the market.
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