China is shunning U.S. soybeans and pork — at least temporarily — in retaliation to U.S. involvement in China’s treatment of Hong Kong, but expectations are that Chinese state buyers won’t be able to shut off U.S. trade for much longer.

Anger in Beijing over President’s Donald Trump’s intentions to punish China for its crackdown on freedoms in Hong Kong is translating into Chinese importers paying more to get their soybeans from Brazil and turning off purchases of much-needed U.S. pork, says Arlan Suderman, chief commodities economist for INTL FCStone.

“Right now (Chinese importers) have a tremendous amount of ships on their way from Brazil … so they can afford to pull back from purchases (from the U.S.) for a while,” Suderman said. “They have an adequate supply of pork in the very short term, but long-term, they’re going to have to have more pork and soybeans and they have very limited options of where they’re going to get it.”

The National Pork Producers Council is concerned about the news coming from China and the group said it is “skeptical” and looking into the situation.

“The country is the world’s biggest producer and consumer of pork,” NPPC said in a statement Monday. “However, China’s hog supply has been ravaged by African swine fever … resulting in a tremendous shortage of pork and mounting food price inflation. The U.S. is typically the largest pork-exporting nation in the world and generally the lowest-cost producer in the world. There is a massive protein hole in China and we are ideally positioned to address this unprecedented sales opportunity. We are skeptical of these reports because again, China is in serious need of reliable, affordable sources of pork.”

The U.S. exported 100,676 metric tons of pork to China in March, almost triple the amount of shipments in the same month a year ago, according to data from the U.S. Meat Export Federation.

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But it is clear that China is retaliating through its trade, and its state importers are paying more money to do so. Chinese importers had been snapping up U.S. soybeans in recent weeks as supplies in Brazil tightened and U.S. prices became more competitive for August and beyond, but that has stopped.

“Last week, (Chinese) state buyers got frustrated because of Beijing’s frustration with the U.S. over Hong Kong,” Suderman said. “State buyers bought 8-to-10 cargoes of Brazilian beans for September-October delivery and paid a premium for them. That was to send a statement to the United States.”

The message has been delivered, but Suderman says the Chinese are also worried about shortages and can’t afford to stay away from U.S. exporters

“All they’ve done is tighten up the Brazil supply even further by doing that,” he said. “There’s not a lot of options. They’re going to have to come back to the United States.”

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