China says it will lift some soybean, pork tariffs
A Chinese state news agency said Friday that China will lift punitive tariffs imposed on U.S. soybeans and pork, but there are so many levels of tariffs it is unclear just what tariffs will not be imposed.
The National Pork Producers Council, which on Thursday urged China to lift its 72% tariffs on pork to reduce food inflation and help trade talks, was cautious in its response.
NPPC President David Herring said “if the media reports were accurate, this was a most welcome development.”
Herring noted that China recently imposed an additional 10% retaliatory tariff on U.S. pork. This translates into U.S. pork producers facing a 72% tariff rate, while most other countries face only a 12% tariff on their pork exports to China.
“Additionally, pork is in short supply in China because African swine fever has ravaged the Chinese hog herd and significantly reduced the production of pork,” Herring said.
“When you consider that China is the largest producer and consumer of pork in the world, the importance of this market to U.S. pork producers is clear. …We are hopeful that this apparent gesture of goodwill by China leads not only to more sales of U.S. pork, but that it contributes to a resolution of U.S.-China trade restrictions.”
AgriCensus, a London-based price reporting firm, noted that Xinhua, the Chinese news service, said that the government “will support relevant enterprises buying certain amounts of soybean, pork and other agricultural products from today in accordance with market principles and WTO rules.”
AgriCensus reported Thursday that the government had told five privately-owned crushers that they would exempt punitive taxes of 30% that had arisen because of the trade war on up to 5 million metric tons of imports.
At least 400,000 metric tons had been purchased in the first two hours of trade on Thursday, with newswires reporting figures of up to 1 million mt. on the day.
Market sources told AgriCensus that the prices paid were in the range of 135-140 c/bu over futures contracts for Q4 shipment CFR North China from the Pacific Northwest.
“This shall hit Brazilian premiums in case true,” said Frederico Humberg, CEO of Brazilian trading house Agribrasil.
AgriCensus said that soybean prices in the Pacific Northwest had risen, while prices in Brazil slid.
Joe Glauber, the former Agriculture Department chief economist now at the International Food Policy Research Institute, tweeted Friday, “The operative word is ‘additional’ tariffs — i.e., the additional 5% China imposed on Sep 1. Still means the 25% surcharge is on the books. Let’s get back to 3% and let commercials (not COFCO or Sinograin) decide when to import.”
–The Hagstrom Report