China Lags in Farm Purchases as Part of Trade Deal

As part of the phase one trade deal with China, China had promised to import $36.6 billion in U.S. agriculture products. In the first half of 2020, China has purchased less than one-fourth of this amount, having purchased $8.7 billion in U.S. agricultural goods. Some people say that there is still time for China to meet its target, especially with soybean and corn harvest right around the corner. The U.S. government is predicting that the coming harvest will be one of our largest soybean and corn harvests to date. Corn itself is estimated to be a record 15.3 billion bushels harvested this fall. With the harvest coming, China has started to shift to U.S. imports on soybeans from Brazilian, who they primarily bought from in the first half of 2020. In fact, China’s soybean imports were up 18% compared to the same period last year, however, more than two-thirds of these soybeans came from Brazil. In Brazil, soybeans hit a record low in March at $16.78 per bag of 60 kilos, prompting China to buy from Brazil rather than the U.S. The quality of the U.S. soybeans will determine how long it takes for China to switch back to Brazil’s soybeans. At the moment, China has booked about 10 million tons of soybeans and 5.7 million tons of corn for shipment in the 2020-2021 marketing year. The start of the marketing year was September 1st, and if the full volume of corn is shipped, this will become the largest U.S. corn volume that China will have imported in a marketing year. Likewise, for soybeans, it will be more than the first six months import amount on soybeans for the U.S. combined.

Do you think China will make up the gap in the trade deal for agricultural products? How is China doing on other parts of the trade deal?

https://www.marketwatch.com/story/china-is-far-behind-farm-purchases-needed-to-fulfill-terms-of-trade-deal-with-us-2020-08-14