China is on a meat-buying spree, increasing beef, pork, and poultry prices around the globe as the communist regime races to replenish its meat stockpiles after the so-called "pig Ebola" hit hog farms across the country, resulting in collapse in China's pig population. Seen as goodwill ahead of trade talks next month, sources told Bloomberg, China is ready to purchase more US pork products, although the reality is that China is desperate to buy pork from anywhere it can find it.
China had to dramatically reduce its pig herd, the world's largest, by at least 33% in the last year after the deadly African swine fever virus devastated its farm belt.
Chinese companies are speaking with Smithfield Foods, controlled by China's WH Group, and Tyson Foods, Bloomberg reported and could finalize a deal in the coming days, if not weeks, for an order that could be around 100,000 tons - a lot of the pork would be used to refill state reserves, sources said.
Potential pork purchases from the US could be a sign of goodwill ahead of trade talks next month. But it seems that China has other concerns: with low stockpiles of meat, the Asian country has been quickly buying beef, pork, and poultry around the world, this year, straining global supplies, to avoid domestic problems as retail pork prices in the country jump 70%.
The country is facing a historic pork shortage, sparked partially by the swine disease and a ban on US agriculture products.
Faced with more food shortages, China granted new tariff waivers for US soybean purchases earlier this week.
Chinese State Councilor and Foreign Minister Wang Yi said in New York on Tuesday that China still wants all tariffs removed before they commit to a trade deal, something that the Trump administration will have difficulty in doing.
As shown in the chart below, S&P GSCI-Lean Hogs Index Spot has found a short term bottom in the last month - on the belief that a trade deal could be imminent - something that is unlikely to happen this year.