China cancels US pork import order as trade war drags on

Hogs are raised on the farm of Roger Dietrich on July 25, 2018 near Elma, Iowa. Dietrich raises hogs in a traditional manner, outdoors, without antibiotics for the specialty pork market.

Scott Olson | Getty Images

The same week U.S. President Donald Trump announced sweeping increases on tariffs against Chinese goods, Chinese buyers dropped orders for 3,247 metric tonnes of U.S. pork - the biggest cancellation in more than a year, according to U.S. Department of Agriculture data released on Thursday.

The cancellation came during the week ended May 9, a blow to the $6.5 billion export market for American pork, vital to the burgeoning U.S. meat industry.

Prior to the trade war, China and Hong Kong combined were the second largest export market for U.S. pork.

For months, the U.S. farm sector - which has been among the hardest hit by the trade war between the world's two largest economies - has been banking on China increasing its U.S. pork purchases due to African swine fever (ASF).

But the trade war, and China's tariffs against U.S. pork, is showing signs of slowing China's willingness to load up on the meat, say industry analysts.

Earlier this year, China canceled sales of 53 metric tonnes in the week ended Feb. 28, sales of 999 metric tonnes in the week ended March 21, and 214 metric tonnes in the week ended April 18, according to USDA data.

Market analysts said the cancellation news on Thursday weighed on the lean hog futures market.

"It's just disappointing that this trade war could drag on for months and that means more tariffs on pork," said Dennis Smith, commodity broker with Archer Financial Services. "This should not be happening. We should be selling a lot of pork to China, because of ASF."

African swine fever kills almost all pigs infected, though it is not harmful to people. The disease has spread rapidly across China, the world's top pork producer. In neighboring Vietnam the government said it will mobilize its military and police forces to combat an outbreak.

USDA said on Thursday that it will soon begin testing sick and dead pigs for the hog virus that has killed herds across Asia in an effort to minimize devastation if the disease enters the United States.

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