USA – World’s top soybean importer, China is expected to purchase 5 million metric tonnes of American soybeans, following a meeting between trade delegates to US and President Donald Trump.
The move seems one step ahead in arriving at a trade truce between the two world economies, since they set a 90-day negotiating window to settle their differences.
Reuters reported that Chinese state-owned firms bought at least 1 million tons of American soybeans on February 1 and according to Trump’s sentiments, this is expected to increase as they look to a lasting solution to the trade dissent.
“They started on a small scale, and today they’re starting very big, and I very much appreciate that,” said Trump in a statement from the White House.
Reports had earlier in December indicated that China was poised to make other rounds of purchases of US soybeans after Trump and the Chinese counterpart Xi Jinping met on Dec. 1.
The trade debacle which shuttered
China from US agricultural imports,
has seen global soybean prices
fall with lower purchases.
Sources familiar with the matter said that more additional purchases were likely to happen to bring total U.S. sales to China to more than 5 million tonnes in December.
Farmers doubt better days ahead
American farmers have expressed fears that despite the ‘promising’ demand from China, the development would barely dent the huge soybean stockpiles in the United States and around the world.
“It certainly is good to see some concessions and more buying interest from China, but this is a concession in terms of a larger trade agreement,” said Terry Linn, an analyst with the brokerage Linn & Associates in Chicago.
“Brazilian offers are cheaper than we are so it’s just part of the negotiation.”
Despite the promises, the 25% tariffs, imposed last summer in retaliation to the United States’ tariffs on Chinese goods, remain in place for American soy imports by commercial crushers in China.
The trade debacle which shuttered China from US agricultural imports, has seen global soybean prices fall with lower purchases.
China has been buying most of its soybeans from Brazil but the wake of the dispute has resulted to swelling supplies in the global market even as US farmers expected record soybean stockpiles.
China in July imposed a 25% tariff on imports of American soybeans in response to U.S. tariffs on Chinese goods.
The tariffs are yet to be lifted as both the US and China work around the clock to solve a dispute that not only threatens farmers but also global economies.
