China boosted imports of farm goods ranging from corn to pork to sorghum last month, signalling a demand recovery for protein in the world’s most-populous nation.
Imports of corn, used in animal feed by the world’s second-largest consumer, climbed to a three-year high in July as the country sought more supplies to plug a widening shortage and cool surging prices.
Dry weather in the northeast growing regions of China is threatening production at a time when demand is expanding from the hog and poultry industry. The Asian nation has been buying hefty amounts of US corn, which have gone some way to meeting its commitments under the trade deal with America.
A surge in inbound shipments may further support Chicago corn, which has advanced more than 7% so far this month. US futures for December delivery surged as much as 1.7% to $3.5075 per bushel Tuesday, a third day of gains. Prices in China are hovering near a five-year high due to concerns about domestic production.
China made its biggest-ever purchase of US corn in July, with cargoes set to arrive at Chinese ports in coming months. It’s under pressure to meet its 2020 target for purchases of US farm products after shipments in the first half of the year hit only 20% of the 2020 target of $36.5 billion, according to the USDA.
US and Chinese trade negotiators discussed the phase-one trade deal, with the US saying that both sides saw progress and are committed to its success. The two countries talked about what China has done as part of the deal, the US Trade Representative said in a statement. Both sides agreed to create conditions to push the deal forward, China’s Ministry of Commerce said in a separate statement Tuesday morning in Beijing.
Imports of most farm commodities surged last month, according to data published by China’s General Administration of Customs. Corn imports surged 136.5% from a year earlier to 910 000 tons in July, pork purchases jumped 120% to 430,000 tons, while inbound shipments of beef rose 35% to 210 000 tons.
The country has been increasing its purchases of animal protein products at a time when world’s largest pork consumer is attempting to rebuild its supply of pigs after outbreaks of African swine fever devastated herds.
Wheat imports jumped 325% in July, while purchases of sorghum, largely used to replace corn, rose 147%. China has been buying sorghum cargoes under the US trade deal.
© 2020 Bloomberg