The transaction comes a few days before American and Chinese officials meet for another round of trade talks
By Diego Flammini
China has purchased a large volume of American wheat for the first time since the trade war started.
China bought 130,000 metric tons (MT) of white wheat, the USDA announced on Thursday.
Since China placed retaliatory tariffs on U.S. wheat in March 2018, the U.S. has only exported about 32,000 MT of hard red spring wheat and about 8,000 MT of soft white wheat to a private buyer.
Industry groups hope this recent purchase is the start of consistent export opportunities for U.S. wheat producers.
“Is this purchase a trend or is it a one off? We don’t know for sure,” Steve Mercer, vice-president of communications with U.S. Wheat Associates, told Farms.com. “We hope this means China is going to be back buying wheat on a regular (basis). We certainly saw that kind of trend before the trade war.”
The purchase, while significant for U.S. wheat farmers, didn’t do enough to move markets.
“The purchase didn’t seem to have much of an influence on market prices,” Moe Agostino, chief commodity strategist with Farms.com Risk Management, told Farms.com. “This week, the Oct. 10 crop report is likely to move markets.”
It’s unclear at this point if the Chinese buyer is a private or public entity.
But that detail is important, Mercer said.
“In the context of the trade war, if the wheat is purchased by the state-sponsored buying service, that would be more significant than if it were purchased by a public one,” he said. “The state-sponsored buyers are much bigger and represent a bigger opportunity for U.S. farmers.”
Officials from both countries are scheduled to meet in Washington, D.C. beginning Oct. 10 to continue trade talks.
“The two sides will look to build on the deputy-level talks of the past weeks. Topics of discussion will include forced technology transfer, intellectual property rights, services, non-tariff barriers, agriculture, and enforcement,” a White House statement said on Monday.