Off The Wire
China buys more U.S. soybeans, record volume of pork ahead of trade talks
CHICAGO (Reuters) - Chinese importers stepped up purchases of U.S. agricultural goods ahead of high-level trade talks in Washington, including another wave of soybean deals and the country’s record largest weekly purchase of American pork, U.S. data showed on Thursday.
Private exporters sold 398,000 tonnes of U.S. soybeans to China, the Department of Agriculture (USDA) reported via its daily sales reporting system that tracks large purchases. It was the second daily “flash sale” of soybeans this week to the world’s top soybean importer.
USDA also confirmed a net 1.18 million tonnes in soybean sales to China in the week ended Oct. 3 and record-large sales of pork, including 18,810 tonnes for shipment this year and 123,362 tonnes for shipment in 2020.
The flurry of deals came ahead of high-level U.S.-China trade talks in Washington that started on Thursday aimed at ending a 15-month trade war that has rattled global markets and slashed U.S. farm product exports to the world’s top commodities importer.
U.S. pork sales to China, the world’s biggest hog and pork market, had been largely disappointing this year following forecasts for massive purchases. Chinese domestic prices are soaring as the deadly African swine fever virus has decimated the country’s hog herd, tightening supplies of China’s favorite meat.
“Nobody’s ever seen these kinds of (pork sales) numbers,” said Bob Brown, an independent U.S. livestock analyst. “Our prices right now are pretty modest especially compared to Europe in particular, which is their other big supplier.”
China has imposed steep tariffs on imports of American pork in retaliation for U.S. duties on Chinese goods, but U.S. prices still look attractive despite the current 72% tariff, traders said.
U.S. soybean sales have also accelerated ahead of the talks in Washington this week in at least four waves of active buying since early September. Beijing awarded some importers waivers to buy U.S. beans that allow imports without steep retaliatory tariffs.
China imported more than 13 million tonnes of U.S. soy in the 2018/19 marketing year that ended Aug. 31 and has bought nearly 5 million tonnes more in the current season, according to USDA data.
The sales, however, are far short of the 30 million tonnes or more that China imported annually from the United States before the trade war.
Reporting by Karl Plume and Tom Polansek in Chicago; Editing by David Gregorio