Chinese Currency Breaks Key Barrier; Pork Prices Stay High
Chinese Currency Breaks Key Barrier; Pork Prices Stay High
The Chinese yuan broke through the key psychological barrier of seven yuan to one U.S. dollar yesterday, finishing the day at 6.992. The yuan appreciated 4.3 percent since the start of the new year, following a 6.9 percent increase in 2007, and is now 18 percent stronger than the dollar since the yuan's dollar peg was abolished in July 2005. Most analysts concur that the Yuan will continue to climb in the foreseeable future, but the appreciation will lose momentum once it passes 6 yuan to the dollar. The 7 to 1 milestone was reached as China announced an upward revision of growth in its 2007 gross domestic product to 11.9 percent from 11.4 percent.
After a just-completed two-week visit to large-scale meat processors throughout central and southwest China, USMEF notes that live hog prices remain high. Current prices for slaughter-ready 90-100 kilogram animals are in the range of 17 yuan per kilogram, $1.10 per cwt. Prices of 30-40 pound piglets for finishing also remain high at about 14 yuan ($0.91) per kilogram.
"There is great interest in sourcing low cost raw material among processors" says Donald Song, USMEF's North China representative. Chinese meat processors have traditionally relied upon their own slaughter capabilities for raw material needs, but the high cost of pork has purchasing departments looking at import alternatives to fill a larger portion of raw material supply. Earlier in the year, analysts predicted that live hog prices would begin to fall by the third quarter of this year, but recent estimates forecast prices will stay high until after next February's Chinese Lunar New Year.
USMEF will present its full observations from its recent Chinese meat processor trip at the Board of Directors meeting in Las Vegas next month.
South Korea
U.S.Beef Technical Talks Resume Following Assembly Elections
The U.S. and South Korean governments resumed technical talks today on U.S. beef access following the National Assembly elections. Political analysts claim that although President Lee's Grand National Party (GNP) eked out a slim parliamentary majority, low voter turnout, the loss of seats by several of Lee's key supporters, and a continued political fracture within the GNP likely will make it difficult for him to take swift action to reopen the beef market. In fact, a senior South Korean government official has been quoted as saying that ending the ban on U.S. beef “will bring political pressure on the Korean government,” and that the Lee administration seeks to retain as much political capital as it can in the early days of since the election.
According to USMEF-Korea, U.S. beef access was not a major campaign issue for candidates vying for the 299 seats in Thursday's elections, but leaders from across Korea's political spectrum are well aware that resolving the beef access issue will be critical to U.S. passage of the U.S.-Korea Free Trade Agreement. Recent polls indicate that the free trade agreement is supported by a majority of Koreans.
Analysts believe the timing of the talks coincide with the planned visit of President Lee to the United States next Tuesday (April 15), which culminates in a coveted visit to Camp David next weekend. USMEF notes that the completion of the technical parameters of a beef access agreement prior to Lee’s arrival is desirable since the two presidents are unlikely to engage in beef negotiations during a visit designed to demonstrate harmony between the two countries. Lee’s U.S. visit is his first overseas trip since he became President, and it will be closely watched by Korean political analysts.
Chinese Currency Breaks Key Barrier; Pork Prices Stay High
The Chinese yuan broke through the key psychological barrier of seven yuan to one U.S. dollar yesterday, finishing the day at 6.992. The yuan appreciated 4.3 percent since the start of the new year, following a 6.9 percent increase in 2007, and is now 18 percent stronger than the dollar since the yuan's dollar peg was abolished in July 2005. Most analysts concur that the Yuan will continue to climb in the foreseeable future, but the appreciation will lose momentum once it passes 6 yuan to the dollar. The 7 to 1 milestone was reached as China announced an upward revision of growth in its 2007 gross domestic product to 11.9 percent from 11.4 percent.
After a just-completed two-week visit to large-scale meat processors throughout central and southwest China, USMEF notes that live hog prices remain high. Current prices for slaughter-ready 90-100 kilogram animals are in the range of 17 yuan per kilogram, $1.10 per cwt. Prices of 30-40 pound piglets for finishing also remain high at about 14 yuan ($0.91) per kilogram.
"There is great interest in sourcing low cost raw material among processors" says Donald Song, USMEF's North China representative. Chinese meat processors have traditionally relied upon their own slaughter capabilities for raw material needs, but the high cost of pork has purchasing departments looking at import alternatives to fill a larger portion of raw material supply. Earlier in the year, analysts predicted that live hog prices would begin to fall by the third quarter of this year, but recent estimates forecast prices will stay high until after next February's Chinese Lunar New Year.
USMEF will present its full observations from its recent Chinese meat processor trip at the Board of Directors meeting in Las Vegas next month.
South Korea
U.S.Beef Technical Talks Resume Following Assembly Elections
The U.S. and South Korean governments resumed technical talks today on U.S. beef access following the National Assembly elections. Political analysts claim that although President Lee's Grand National Party (GNP) eked out a slim parliamentary majority, low voter turnout, the loss of seats by several of Lee's key supporters, and a continued political fracture within the GNP likely will make it difficult for him to take swift action to reopen the beef market. In fact, a senior South Korean government official has been quoted as saying that ending the ban on U.S. beef “will bring political pressure on the Korean government,” and that the Lee administration seeks to retain as much political capital as it can in the early days of since the election.
According to USMEF-Korea, U.S. beef access was not a major campaign issue for candidates vying for the 299 seats in Thursday's elections, but leaders from across Korea's political spectrum are well aware that resolving the beef access issue will be critical to U.S. passage of the U.S.-Korea Free Trade Agreement. Recent polls indicate that the free trade agreement is supported by a majority of Koreans.
Analysts believe the timing of the talks coincide with the planned visit of President Lee to the United States next Tuesday (April 15), which culminates in a coveted visit to Camp David next weekend. USMEF notes that the completion of the technical parameters of a beef access agreement prior to Lee’s arrival is desirable since the two presidents are unlikely to engage in beef negotiations during a visit designed to demonstrate harmony between the two countries. Lee’s U.S. visit is his first overseas trip since he became President, and it will be closely watched by Korean political analysts.