India Implements Retaliatory Tariffs on U.S. Agriculture Exports
- India is the latest country to implement tariffs against U.S. agricultural exports. The list of items includes lentils and chickpeas; U.S. row crops and oilseeds are not included.
- India announced a list of retaliatory targets in June 2018 but the government has held off on implementation while trying to negotiate a trade deal with the U.S. The Indian tariffs come as President Trump decided to strip India of trade privileges under the Generalized System of Preferences (GSP).
- The GSP is a U.S. trade program which is aimed at helping the developing countries climb out of poverty by eliminating duties on thousands of products from 120 designated countries.
- India was the most significant program beneficiary and had seen over $5 billion worth of goods qualify for duty-free import into the U.S. each year.
- India’s 30% import tariff on U.S. chickpeas rose to 70% and the tariff of lentils is 40%.
- What It Means For The US Farmer: At FBN we believe that India’s tariff structure on U.S. lentil and chickpea exports has the ability to negatively impact the U.S. producer of those items. FBN continues to believe that India could shift their focus away from procuring chickpeas and lentils from the U.S. to Canada.
Chinese Pork Imports Surge During May
- Chinese customs data showed that pork imports rose approximately 63% YoY during May.
- May imports came in at 187,459 tonnes, the largest volume since 192,348 tonnes in August 2016.
- The increase comes as African swine fever (ASF) continues to infect pigs across China, the producer of half the world's hogs, leading to a sharp decline in the size of the herd. There is no vaccine for ASF.
- As domestic Chinese pork prices move sharply higher during the first four months of 2019, China has become increasingly reliant on imports to help soften price volatility.
- China has implemented a 62% import tariff on U.S. pork.
- What It Means For The US Farmer: At FBN we believe that the mortality rates from ASF will continue to be a negative for U.S. soybean exports. The current trade tensions between the U.S. and China are not a positive for the U.S. pork export program as trade data shows muted export volume to China. We also believe that the current tariff structure combined with China’s non-science ban on pork with ractopamine continues to plague what could be a record setting year for U.S. pork exports to China.
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