China agriculture minister heads to US to discuss trade issues

China's Minister of Agriculture Sun Zhengcai Monday (September 21)  allayed concerns China would target US soy exports after the US slapped punitive tariffs on Chinese tire exports Sept. 11, though he stopped short of entirely ruling out trade action.

 

Sun also said he was bound for the US Monday afternoon to discuss agricultural trade issues.

 

The minister told a news conference the two sides want to "strengthen cooperation" and sign new agreements, but didn't provide details.

 

Trade tensions rose last week after the US slapped punitive tariffs on Chinese tire exports. Soy has now come into focus as the US is China's largest supplier of the bean.

 

Sun said "cooperation and mutual purchases" in agricultural products were "an important component of our trade relationship," but stopped short of saying whether China would take any trade-related measures against US soy exports. "I have no answer for that right now."

 

But even as he navigated a thin line on foreign trade issues, Sun firmly doused concerns the recent price hikes in basic farm products like hogs and eggs would contribute to inflation.

 

The increase in the prices of hogs and eggs is within the "normal range" and part of a recovery from low price levels, Sun said.

 

The rising prices won't have a big impact on the consumer price index, he added.

 

Sun said prices tend to reach a peak in the weeks before the two major holiday periods - the Lunar New Year at the start of the year and the National Day holiday in October. They tend to trough in May, he added.

 

China's CPI, its key inflation gauge, has remained down for the year so far although food prices as a whole, which account for roughly a third of the CPI basket, have been recovering.

 

While senior Chinese officials remain concerned flush liquidity in the domestic economy may fuel future inflationary pressure, they also have said there is currently no such pressure.

 

Sun pointed out food prices also tend to run up ahead of holidays seasonally. China observes an eight-day break starting Oct. 1 for the National Day and Mid-Autumn Festival celebrations.

 

Even with drought and frost concerns, China's prospective harvest of autumn crops should be good, Sun said, barring any major disasters in the latter half of this year.

 

Farmers are making good progress in harvesting corn, soy and rice so far, he said.

 

About 39 percent of the rice crop has been harvested so far, along with 25 percent of the corn crop and 25 percent of the soy crop.

 

In southwestern China, where harvesting began early, 72 percent of crops has been harvested, Sun said.