“China has been importing a large quantity of meats this year, and has detected virus on the packaging of cold chain products many times, even as lots of disinfection has been done domestically,” Gao Guan, spokesman for the China Meat Association, said by telephone on Tuesday.

“It should be better to handle this (virus control) at the meats exporting origins, and carry out disinfection at the production plants,” as the cost would be lower, and efficiency higher, Gao added.

China has ramped up disinfection and virus testing on frozen food after it found coronavirus on imported products and packaging.

The measures have pushed up costs, disrupted trade, and irritated major exporters.

The semi-official industry body suggested exporters in COVID-19 hit countries should disinfect the outer packaging of products and the inner side of containers before sealing export products, a statement published on the association’s official WeChat account said at the weekend.

The initiative was proposed to “ensure the safety of imported cold-chain food and boost consumers’ confidence in imported cold-chain products,” the statement said.

The proposal came after some major exporters, including JBS in Brazil, started to take measures including extensive disinfection of products and storage sites, to supply China with safe products, Gao said.

Reported cases have shown that contact with packaging contaminated with coronavirus could lead to human infection, said the Chinese association.

The World Health Organization has said the risk of catching COVID-19 from frozen food is low. Chinese officials echoed that such risk was low, but there was still a risk.

“The virus is new. We are still accumulating experience when fighting against it,” Gao said.

“We should get together and discuss how to use the most scientific, efficient and low-cost way to secure public health, and trade at the same time,” Gao added.

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China has urged local authorities to support qualified domestic firms to “go out,” and build hog farming bases in countries where pig products are eligible to be exported back to China, according to a joint statement issued by the country’s state planner and agriculture ministry.

Beijing has been taking various measures to boost pig production and increase pork supplies, after the deadly African swine fever significantly cut output and pushed prices of the country’s favourite meat to record high levels.

The latest official document, from the top economic planning body and agriculture authority, highlights Beijing’s concern as soaring pork prices pushed consumer inflation to its highest levels in years, and an unprecedented coronavirus disease further disrupted logistics and hindered pig production.

“Top government documents in the past usually stopped at trade, talking about buying either grains or pork from abroad, but never involved raising pigs overseas,” said an executive with a major pig producer.

“But then again, it also never happened in history that African swine fever has created such a big supply gap,” said the executive, who declined to be named as he was not authorized to talk to the media.

The pig farms should be built in countries with stable bilateral trade relations with China, and are African swine fever-free, according to the top government document, issued by the national development and reform commission and ministry of agriculture and rural affairs.

Beijing also urged local authorities to secure construction materials for new and expanded pig farms during the coronavirus outbreak, and allow farmers to build pig pens on deserted land and facilities for animal waste treatment and sterilization on some farmland, according to the document.

“The state hopes to boost pork supplies to normal levels as soon as possible, with all kinds of measures,” said Lei Yi, a Shenzhen-based analyst with China Merchants Securities.

“It encourages imports from overseas and raising pigs abroad as well. But it takes time for it to be implemented while not many companies have tried (raising pigs overseas) before,” said Lei.

Beijing’s efforts came as African swine fever continues to spread in the world’s top pig herd. Three new cases of the virus have just been reported in China in the past week.

— Reporting for Reuters by Hallie Gu and Shivani Singh.

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Liu was speaking on Wednesday at a press briefing after signing the Phase One trade deal with U.S. President Donald Trump. The agreement includes a pledge by China to buy an additional at least $12.5 billion worth of agricultural goods in 2020, and at least $19.5 billion more than the 2017 level of $24 billion in 2021 (all figures US$).

Chinese companies will import U.S. agricultural goods according to consumers’ need, and demand and supply in the market, Liu told the reporters, according to state-owned CCTV.

“The China market is a very important part of the international market now. It is not that like any country can export as many products (to China) as they want. Rather you need show the competitiveness of the product,” he said.

Liu’s comments underscore the uncertainty that remains about the deal and how China will implement the uptick in U.S. imports after an 18-month trade dispute that caused Chinese agricultural buyers to shift their supply chains.

To reach the purchase target, China will need to increase its buying by intervening in the agricultural products market without upsetting its current trade partners, said a China-based grains trader with an international trading firm who is not allowed to speak to the media.

“The government will intervene to some extent, like asking state firms to buy or providing some quotas,” but China is basically letting all nations compete and offer better priced products, the trader said.

Under the deal, Beijing did not reduce or remove additional tariffs on U.S. farm products introduced in retaliation to U.S. tariffs.

Competition between U.S. and Brazilian soybean supplies will be a focus as there are concerns China could cancel some Brazilian imports to bolster its U.S. purchases.

China buys about 80 per cent of Brazil’s soybean exports.

U.S. soybean imports are expected to be 35 million tonnes in 2020 as it has already bought soybeans from Brazil for the year, Li Qiang, chief analyst with Shanghai-based consultancy JC Intelligence said.

China uses soybeans to crush into cooking oil and soymeal for animal feed. Demand has declined as the African swine fever disease has decimated its pig herd.

“[China will] probably get some tariff exemptions for pork and soybeans going forward,” INTL FCStone senior Asia commodity analyst Darin Friedrichs said in a note to clients. However, he believes the Phase One agriculture purchases are difficult to achieve.

Other analyst believe China can implement the pledge. “If some U.S. products do not have advantage in price or do not have enough output, there are many other U.S. agriculture products available that China can increase imports of, like meats, and ethanol,” Li from JCI said.

— Reporting for Reuters by Hallie Gu and Shivani Singh.

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Earlier this month, Beijing and Washington announced a Phase 1 trade deal, under which China has agreed to import more farm goods from the United States.

The United States has demanded that China change its GM crop import application process, saying they want it to be more transparent, timely and based on scientific methods.

The two new GM crops approved were Corteva Agriscience’s DAS-81419-2 soybean and 55-1 papaya, jointly developed by the U.S. Department of Agriculture and Hawaii University.

Corteva said it was pleased Chinese authorities had authorized imports of the Conkesta soybean trait, which controls insects. Conkesta will be stacked with another GM soybean trait, Enlist E3, which confers herbicide resistance.

Corteva was the agricultural unit of DowDuPont, prior to being spun off as an independent company. It is still waiting for Chinese regulators to review a canola trait, which has been approved for years in the U.S., Canada and other markets.

The DAS-81419-2 trait picked up Canadian approvals for food and feed use and unconfined release back in 2014 but no varieties with that trait are currently registered in Canada.

Monday’s approvals were seen “as more evidence of progress as a result of the trade talks,” said Arlan Suderman, chief commodities economist for U.S. broker INTL FCStone.

“Dealing with a quicker and more transparent process of approvals was certainly something the U.S. was pushing for,” he said.

The United States is the world’s biggest producer of GM crops, while China is the top importer of GM soybeans and canola.

U.S. farmers and global seed companies have long complained about Beijing’s slow and unpredictable process for approving GM crops for import.

“This further expands channels for imports of U.S. agricultural products, and helps pave the way for buying more U.S. soybeans,” said Li Qiang, chief analyst with Shanghai JC Intelligence Co. Ltd.

“Approval of the papaya variety could help promote more fruit imports from the U.S.,” Li added.

China also renewed permission for imports of 10 other GM products, including BASF developed T25 corn, A5547-127 soybean, T45 canola, Oxy-235 canola, and Ms8Rf3 canola.

Bayer-owned Monsanto Far East Ltd.’s MON89788 soybean, 15985 cotton and H7-1 beet were also reapproved, along with DuPont subsidiary Pioneer’s 305423 soybean and 305423×GTS40-3-2 soybean.

The canola, soy, corn and beet traits for which China has now granted renewals have long since picked up approvals for food, feed and unconfined release in Canada. While 15985 cotton is not grown in Canada the trait has Canadian food and feed use approvals.

All approvals took effect from Dec. 2, 2019 and will last for three years, according to a statement on the agriculture ministry’s website.

Bayer and BASF had no immediate comments.

— Reporting for Reuters by Shivani Singh and Hallie Gu in Beijing; additional reporting by Tom Polansek in Chicago. Includes files from Glacier FarmMedia Network staff.

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China imposed a 25 per cent tariff on U.S. soy imports last year as Washington-Beijing trade disagreements boiled over into tit-for-tat levies on each other’s goods. That blow was felt on both sides of the Pacific: China was the top buyer of U.S. soybeans.

A warming of relations led to hopes in the soy trade that the situation might improve: After talks last month, U.S. President Donald Trump said he had agreed not to impose new tariffs on Chinese goods – if China purchased more U.S. agricultural products.

There have been no signs of U.S. soybean sales to China in recent weeks, but in an apparent goodwill gesture Chinese officials briefed private importers last Friday on a plan to boost them, according to three people familiar with the matter. These and other people interviewed by Reuters on the subject declined to be named due to the sensitivity of the issue.

According to one of the sources, a group of five crushers were told by China’s state planner that they could apply for exemptions from the 25 per cent tariffs on some U.S. soybean cargoes arriving before the end of December.

The source said the group included Yihai Kerry, owned by Singapore-based Wilmar International, state-owned Jiusan Group, and privately owned Shandong Bohi Industry Co, Hopefull Grain & Oil, and China Sea Grains & Oils Industry.

But even without the extra tariffs, U.S. soybeans could not compete with Brazilian supplies on price until at least October, based on current premiums and margins, according to six traders and analysts surveyed by Reuters, making immediate orders unlikely.

“It is hard to see buying of large U.S. shipments (for delivery to China) for the time being,” said Li Qiang, chief analyst with Shanghai JC Intelligence Co Ltd.

China’s National Development and Reform Commission, the state planning agency that organised the Friday meeting, did not respond to a fax seeking comment.

Yihai Kerry, Jiusan, Bohi declined to comment, while China Sea could not be reached for comment. A staff in the public relations department at Hopefull and a manager from the company’s international trade division said they were not aware of the matter.

‘Still a ways to go’

Beijing’s new plan came after Chinese state firms COFCO and Sinograin bought around 14 million tonnes of U.S. soybeans following a truce agreed by leaders of the two countries last December.

Each of the five crushers asked to take part in the new plan was given a quota separately, with the total volume of this batch of extra tariff-free imports estimated at around 2-3 million tonnes, according to one person with knowledge of the plan.

Earlier this week U.S. Agriculture Secretary Sonny Perdue said China had commitments to buy 20 million tonnes of soybeans, though he did not specify a timeframe.

“Some of that materialised but not enough and we hold them accountable for that,” Perdue said. “I think the latest numbers I saw this week, we were up to 13.67 (million tonnes) if I recall correctly, so they still have a ways to go.”

For the whole of 2018, China imported 16.6 million tonnes of soybeans from the United States – about half of 2017’s 32.9 million tonnes – as the tariffs on American cargoes cut into buying.

But China’s demand for soybeans crushed into livestock feed has also decreased dramatically in recent months as African Swine Fever swept across the country, resulting in the death or culling of millions of pigs.

While COFCO and Sinograin bought U.S. soybeans on government orders, the Chinese sources said, the five private importers at the meeting make buying decisions based on commercial interests – mainly crush margins – which don’t favour immediate buying.

Huawei connection?

Data shows crushers in Rizhao, a major hub for soybean imports in northern China, currently lose 133 yuan ($19.33) for every tonne of the oilseed they process. <CNSOY-RZO-MRG>

“We are not in shortage of beans for August and September, but it is hard to say about future months,” said a manager at a crusher eligible for the tariff exemptions, who spoke on condition of anonymity.

China’s next steps on U.S. soybean imports remain unclear, but any large volume of purchases will likely be tied to the U.S. lifting sanctions on Chinese tech giant Huawei Technologies , two analysts suggested.

“How many U.S. soybeans China will buy, and for how long, depends on how much the U.S. will adjust its policies on companies like Huawei,” said Li, the Shanghai JC Intelligence analyst.

Washington banned American companies from selling most U.S. parts and components to Huawei without special licences, citing national security concerns.

But Trump said last month that sales could resume as he sought to restart trade talks with Beijing.

The Trump administration said on Wednesday that it plans to handle applications from tech companies seeking waivers over Huawei blacklisting within the next few weeks.

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