BEIJING: China’s yuan extended losses to a new 18-month low against a firmer dollar on Monday, breaching key thresholds, as sluggish April trade data reaffirmed market worries that COVID-19 induced lockdowns across the country are taking a toll on the economy.
China’s export growth slowed to single digits last month, while imports were unchanged as tighter and wider pandemic-related curbs halted factory production, disrupted supply chains and triggered a collapse in domestic demand.
Prior to market opening, the People’s Bank of China, also known as PBOC, set the midpoint rate at 6.68 per dollar, 567 pips or 0.85 percent weaker than the previous fix 6.63, the weakest since Nov. 3, 2020.
In the spot market, the onshore spot yuan fell below the psychologically important 6.7 per dollar to a low of 6.71, the softest level since Nov. 4, 2020.
By midday, it was changing hands at 6.70 per dollar, 444 pips weaker than the previous late session close.
Meat imports drop 36 percent on year in April
China imported 592,000 tons of meat in April, down 35.7 percent from the same month a year earlier, customs data showed on Monday, as a surge in domestic pork output curbed appetite for shipments from abroad.
Imports have also been impacted by strained logistics caused by an extended COVID-19 lockdown in Shanghai.
Meat imports for the first four months of the year were down 36 percent from a year before at 2.26 million tons, according to the data, released by the General Administration of Customs.
Demand for imported pork has slumped this year after Chinese hog farmers increased breeding to compensate for the losses caused by African swine fever in recent years.
The surge in supply has come as demand has suffered from the closure of restaurants across the country to contain China’s worst COVID-19 outbreak in two years.
Soybean imports rise
China’s soybean imports in April climbed from a month ago, helped by the arrival of cargoes previously delayed by poor weather and slow harvests in South America, customs data showed on Monday.
China, the world’s top soybean importer, brought in 8.08 million tons of the oilseed in April, up 27 percent from 6.35 million tons in March, according to data from the GAC. The figures were also up from 7.45 million tons in the same month a year earlier.
In the first four months of the year, China imported 28.36 million tons of soybeans, down 0.8 percent from 28.59 million tons in the previous year, according to the data.
Imports of beef have also slowed due to the lockdown in Shanghai, the country’s key port for beef arrivals.
Coal imports soar over panic orders
China’s coal imports surged 43 percent in April from March, driven by panic buying over concerns of supply disruption in the wake of Russia’s invasion of Ukraine that has dropped off as traders turn to cheap domestic supply.
China shipped in 23.55 million tons of coal last month, data from the GAC showed on Monday. That compares with 16.42 million tons in March and 21.73 million tons in April 2021.
For the period January to April, China brought in a total of 75.41 million tons of coal, down 16 percent from the same period a year earlier.
Rare earth exports rise
China’s exports of rare earths in April rose 17.8 percent from the corresponding month a year earlier, data from the GAC showed on Monday.
Exports of the group of 17 minerals from the world’s largest producer were 4,427 tons last month, versus 3,757 tons in April 2021 and 4,845 tons in March 2022, the data showed.
In the first four months of the year, China exported 17,107 tons of the minerals, up 9.4 percent on an annual basis.
(With input from Reuters)
