Will China’s accelerated pork buys around the world continue after holiday?
In today's updates:
* Trump expected to travel early this year to India to reach a mini trade agreement
— President Trump wants to travel to India, soon, to reach mini trade agreement. Depending on how long it takes for the Senate impeachment trial to end (some predict by the Feb. 4 State of the Union address), sources say President Donald Trump wants to travel to India to finalize details on an apparent coming mini trade agreement. The accord, if announced, would include increased market access in India for U.S. farm products, including produce and dairy products, contacts advise.
The two countries are in touch to work out mutually convenient dates for the visit, according to a senior Indian government official. Trump and Prime Minister Narendra Modi are expected to also sign an agreement on civil aviation apart from the long-pending bilateral trade deal, The Hindu newspaper reported.
— U.S./China trade policy update:
- Will China’s accelerated pork buys around the world continue after holiday? The follow chart shows China’s recent hefty imports of pork from around the world, including from the United States. Analysts wonder if this will be sustained after the Chinese New Year.
- China’s …. China's Q42019 pork output was down 31% from a year ago and China's swine population was the smallest in 25 years, according to data released by the National Bureau of Statistics recently. The Bureau estimated that the doubling of pork prices from a year earlier accounted for about half of the 4.5% increase in China's December CPI.
Details. The Bureau's Jan. 17 release of preliminary macroeconomic data reported that 2019 pork output fell 21.3% from 2018. Poultry production expanded 12.3% year-on-year, and egg, beef, and mutton output also grew. However, the 5.1 MMT gain in other animal protein output offset less than half of the -11.5 MMT loss of pork output in 2019.
— Some Phase 1 agreement naysayers and even some supporters have asked what China received as part of signing the accord. China watchers say the country would not have signed the agreement if they did not see it as a win-win situation. As for what China received, some items include:
— The U.S. hold off on imposing further tariffs that were to take place last December, and ratcheted back some already in place.
— The U.S. Treasury Dept. reversed an August decision to list China as a currency manipulator.
— The Trump administration, at the request of Chinese officials, agreed to resume twice-yearly dialogues with China aimed at resolving economic disputes, a process instituted under President George W. Bush.
— Perhaps the most important is a de-escalation of the recent tit-for-tat trade war to give Chinese officials more time to delink their buys of strategic products (semiconductors, etc.) from the United States.
— Regarding enforcement of the Phase 1 package, the Trump administration said it called for each country to establish a special office to monitor the deal’s implementation and address any disputes. If conflicts are not resolved within 90 days, the U.S. could take unspecified “proportionate” action against China and vice versa. Either party could also nix the deal with 60 days notice.
— President Trump talked to Farm Bureau members in Austin, Texas, Sunday and will be in Iowa Jan. 30 for a campaign rally. The Trump campaign announced the rally will take place at the Knapp Center at Drake University in Des Moines. The Iowa caucuses will take place on Feb. 3. His recent Phase 1 deal with China and the coming signing of the USMCA with Mexico and Canada were highlights of his comments to the Farm Bureau. Similar topics will likely be his pitch to Iowa voters, along with expected remarks on corn producers’ biggest topic: the ethanol/Renewable Fuel Standard (RFS) program. Link to what Trump said Sunday at the Farm Bureau confab.
Democrats are quick to downplay Trump’s latest trade policy moves. “True to form, Trump is getting precious little in return for the significant pain and uncertainty he has imposed on our economy, farmers and workers,” said former Vice President Joe Biden, a leading candidate for the Democratic presidential nomination.
Trump last Thursday said the China deal was evidence that his tariff strategy had paid off, tweeting that “farmers are really happy” with the outcome.
— Trump’s approval ratings among rural voters rises to highest level since poll began, according to Farm Journal’s latest Pulse poll. Overall job approval for President Trump ticked up a point in January to 83% of the 1,286 respondents, the high mark in the months that Farm Journal has been tracking the president’s approval. Only 18% disapprove.
Perspective: Of note is the strongly approve category went up three percentage points from an already lofty (December) number and his highest overall approval ratings ever. That says the president's approval is rock-solid. With the recent upbeat news on USMCA and the Phase 1 accord with China, the ratings will likely remain firm ahead. Trump needs the rural vote to keep the same states he won in 2016 in his win column come November. Contacts say he is focusing on winning Minnesota this time (he was close in 2016) as a backstop should he lose a state he won in 2016. That means agriculture will continue to be a key topic in the president's re-election campaign.
— Markets. All three indices finished the week at record marks. The Dow gained 50.46 points, 0.17%, at 29,348.10. The Nasdaq gained 31.81 points, 0.34%, at 9,388.94. The S&P 500 moved up 12.81 points, 0.39%, at 3,329.62.