China suspends pork trading until next week
Pork trading in China has been suspended this week, according to The Ministry of Agriculture. Officials declared that behind the decision stands reasonable doubt that meat can carry the coronavirus from one region to another, infecting large parts of the population.
Trading will be resumed next week, giving time for authorities "to ensure true data reliability". A first shock was felt in the American market where lean hog futures quotation has dropped over $10 in a week. "It appears for some reason lean hog futures traders believe Coronavirus in China is going to have consumers stop eating pork. Not sure where that idea comes from," commented Jim Long, President and CEO of Genesus Inc.
US pork exports were 43,600 tonnes (Jan 17-23), double from a year ago. China was 18,620 tonnes (the highest week ever) up from 3,000 tonnes a year ago.
"On Thursday, January 30, 2020, in China, the average price of hogs was 36.32 RMB/kg ($5.19) steady with the prior week. In our minds, the hog price is an indicator of demand. If hog price holds it means the market is in place. It seems so far the Chinese continue to eat pork," added Mr. Long who also took a look at the main producers in Europe, (Jan 29) Germany 1.85 Euro/kg +1.6% and (Jan 30) Spain 1.424 Euro/kg +0.3%.
On the other hand, Brazilian meat producers JBS and BRF declared for Reuters that the coronavirus outbreak in China could boost Chinese demand for their products, including pork. Mainly for food safety issues.
On January 15, China and the US have signed the Phase 1 trade agreement, reducing the duties on some agricultural products, including pork.
eFeedLink predicts Chinas pork imports from the US to reach $3.1 billion in 2020 up from about $1.25 billion in 2019. Some of the increase will be at the expense of Brazil and the EU.
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