China could buy up to US$50 billion of American ag goods
By Diego Flammini
China may significantly increase its volume of U.S. ag imports once the two countries sign a trade deal.
Chinese and American officials met in Washington, D.C., last week for another round of trade talks, and this time it appears the two parties have made progress on intellectual property, financial services and agriculture.
“A tremendous deal for the farmers,” President Trump told reporters at the White House on Friday. “A purchase of — from 40 to 50 billion dollars’ worth of agricultural products. To show you how big that is, that would be two and a half, three times what China had purchased at its highest point thus far.”
China’s highest intake of American ag goods was in 2013, when U.S. ag imports totaled US$29.4 billion.
China would increase its U.S. ag purchases over two years, U.S. Treasury Secretary Steven Mnuchin said.
Markets reacted to the president’s announcement.
“It was maybe a little bit of buy the rumor, sell the news,” Moe Agostino, chief commodity strategist with Farms.com Risk Management, told Farms.com. “Markets are confused because, since Friday’s announcement, China has come back and warned that it’ll make good on the (ag imports), but the U.S. has to lift all of the tariffs.”
Producers could see grain prices improve as a result, Agostino said.
“Between ongoing trade talks, and weather issues in the U.S. and South America, I think, if farmers are patient, they’ll continue to see the (price) trend move higher,” he said.
Farm groups are hopeful the trade war between these two countries is almost over.
“While it is good news to hear the United States and China have reached a partial agreement in this conflict, the (American Soybean Association) is still awaiting additional information on the initial agreement and the potential impact on U.S. soy growers,” the organization said in an Oct. 12 statement. “ASA remains hopeful this is a step toward rescinding the tariffs and helping restore certainty and stability to the soy industry.”