January 17, 2020
China's current agriculture suppliers unaffected by US-China trade deal
According to state-owned CCTV, China Vice Premier Liu He said current agricultural commodity suppliers for China will not be affected by US-China phase one trade deal as purchases will be conducted on market principles, reported Reuters.
The Vice Premier said companies in China will purchase United States agriculture products based on the need of consumers, in addition to market demand and supply.
China Vice Premier Liu He and US President Donald Trump signed the phase one trade deal on January 15, 2020. The agreement includes China's pledge to purchase additional US$12.5 billion US agricultural goods this year, and in 2021 anotherUS$19.5 billion more than 2017 purchases of US$24 billion.
The Vice Premier's comments don't confirm how China will achieve its pledge of increased US agricultural goods, after the prolonged 18 month trade war between China and the United States resulted in Chinese agricultural buyers switching to other nations for supply sources.
In the phase one agreement, China did not remove or reduce current tariffs on US agricultural products, imposed in reprisal to tariffs imposed by the US.
The focus is now on US and Brazilian soybeans, as there are fears that China will abort its Brazilian imports to boost its US agriculture purchases. 80% of Brazil's soybeans are exported to China.
Li Qiang, Shanghai-based consultancy JC Intelligence chief analyst said 35 million tonnes of US soybean are expected to be imported into China this year as the country has already purchased Brazilian soybeans this year.