A day after sources indicated that Beijing has granted fresh waivers to state and private buyers for US soybeans, China is said to be readying purchases of US pork amid shortages at home and ahead of principal-level talks between Liu He, Bob Lighthizer and Steve Mnuchin in Washington early next month.
The plans are not final yet, but sources told Bloomberg volumes could be around 100,000 tons. Chinese companies are making price inquiries to exporters that include Smithfield Foods and Tyson Foods.
As an aside, recall that Smithfield is owned by China’s WH Group. That ownership structure meant that at one point last year, the US government was set to buy nearly a quarter of a million dollars worth of ham products from a Chinese conglomerate via Smithfield as part of the farmer bailouts. Asked if the USDA could guarantee the $240,000 US taxpayers were set to spend on ham ostensibly to support hog farmers wasn’t going to be funneled straight back to China (via WH Group), the answer was “no”. “We do not have the ability to police whether money will eventually filter to the Chinese”, a USDA spokesman told WaPo at the time.
Read more: China Is Buying Soybeans Again, Providing More False Hope To Trump’s ‘Great Patriot Farmers’
The rumored new purchases come as China – the largest consumer of the meat on the planet – struggles with something of a pork crisis. “Prices of pork have surged more than 70% this year in China due to the spread of a deadly pig disease”, Bloomberg reminds you, adding that the country’s hog population has plunged by nearly 40%.
China was already buying more pork from the US. July imports hit a two-year high.
In any event, this is yet another piece of incrementally positive news amid the incessant headline hockey leading up to next month’s high-level trade talks, and again suggests that Beijing is prepared to make good on at least some the “large” farm purchases that Donald Trump continues to insist are in the offing.
Meanwhile, Mainland shares fell on Wednesday as investors look ahead to the long holiday. The Shanghai Composite closed on the lows despite the pork news.
In Hong Kong, the Hang Seng had its worst day in a month, falling 1.3%. It was the seventh down day in eight sessions.
Not helping sentiment on Wednesday was Trump’s combative speech at the UN General Assembly, where the US president lambasted China’s trade record.
Although his foreign policy remarks were overshadowed by domestic political drama on Tuesday, he did not strike a conciliatory tone despite the proximity of the trade talks with Liu.
It’s conceivable that impeachment proceedings against Trump could compel the White House to strike a deal with China in the interest of shoring up support for the president by way of an assumed surge in domestic stocks. A truce could also stave off a recession in an election year.
Read more: Trump’s UN Broadside Against China Risks Derailing Fragile Negotiations — Again
Big number reality check: 100,000 tons of pork = 2.3 oz per Chinese person, or about half a spare rib or a third of a pork chop.