Chinese and American delegates met in Hawaii to discuss bilateral relations
By Diego Flammini
China appears to be ready to make good on its promises set out in a trade agreement signed with the United States.
Meetings between U.S. Secretary of State Mike Pompeo and high-ranking Chinese officials in Hawaii on Thursday resulted in China agreeing to increase its purchases of products like soybeans, corn and ethanol, Bloomberg reported.
Pompeo also alluded to a Chinese dedication to the Phase 1 agreement the two countries signed in January.
“During my meeting with (Chinese Communist Party) Politburo Member Yang Jiechi (China’s vice minister of foreign affairs), he recommitted to completing and honoring all of the obligations of Phase 1 of the trade deal between our two countries,” Pompeo tweeted on Thursday.
As part of the bilateral agreement, China agreed to purchase $36 billion of ag goods in year one of the deal.
But in the first four months of 2020 China has only imported about $5 billion of U.S. ag products, USDA data shows. That figure is about 13 percent of the levels set out in the agreement.
In year two of the deal, China is set to buy $55.8 billion of American farm products.
Commodity markets reacted positively to last week’s news from the U.S. and China.
On Friday, soybean futures prices on the Chicago Board of Trade increased by about 3.5 cents to close at $8.76 per bushel. Soybean prices opened Monday at $8.75 per bushel.
Markets are waiting to see how the situation progresses, said Abhinesh Gopal, head of commodity research with Farms.com Risk Management.
"The news of last week produced knee-jerk positive reactions in soybeans, hogs and cotton," he said. "Prices do not seem like they are rallying based off of that news as ag markets are mostly in a wait and see mode, but it did give some crop prices a nudge higher."