China Economy

A 'mutual interest' in pork could help make progress in the US-China trade war

Shriya Sharma
China may have lost more than 50% of its hog population: Analyst

As the U.S. and China square off in their latest round of trade talks, one of the topics on the table will be Chinese purchases of agricultural goods. While soybeans have been a commodity making headlines, the world's two largest economies may actually be able to find some common ground on another product: Pork.

That's according to Darin Friedrichs, senior Asia commodity analyst at financial services firm INTL FCStone, who told CNBC on Tuesday that China is primed to make a deal on the matter. That's because pork inflation is a concern in the Asian giant as the hog population has fallen precipitously due to an ongoing epidemic of the African Swine Fever virus.

American pork producers, meanwhile, could fill the growing domestic gap in the world's largest pork market, according to the commodity analyst.

"Pork would be, sort of, the obvious product that China really needs and America could easily supply," Friedrichs said.

Pigs raised by farmers are seen at Linquan county on December 5, 2018 in Fuyang, Anhui Province of China.
Visual China Group | Getty Images

U.S. hog farmers have been suffering during the more-than-one-year-long trade war. They've been virtually locked out of the Chinese market as American pork entering China now faces a 62% levy, according to a Reuters analysis of data from the U.S. Meat Export Federation and the U.S. Department of Agriculture.

That levy is part of the escalating tariffs that Beijing and Washington have imposed on each other's goods.

Meanwhile, the African Swine Fever epidemic began last year in China and is showing no signs of abating. The losses have been so significant that some predictions say the country's domestic pork population could be halved by the end of this year.

That all comes together to represent some potential common ground between American and Chinese negotiators.

"Pork inflation is really high in china right now so pork could be a potential issue where both sides have a mutual interest," Friedrichs said.