May 24, 2018
China seen to escalate purchase of US soy as trade tension eases
China's purchase of US soy could escalate soon, with trade tension between China and the US easing and a looming trade war between the two nations averted.
Earlier this month, it was reported that China had stopped buying US soy, as factories were instead buying beans from other countries such as Canada and Brazil.
Last Saturday, May 19, the US and China issued a joint statement saying both countries had reached a consensus to take effective measures to "substantially decrease the United States trade deficit in goods with China" by significantly increasing its purchase of US products, especially agricultural products, and protect intellectual property, according to a report by the Iowa Soybean Association (ISA).
In return, the Trump administration won't enact, in the meantime, up to $150 billion in proposed punitive tariffs on Chinese products.
The ISA said that it appeared that soybeans-the US' No. 1 agricultural export-and other agricultural products were a big part of the deficit-reduction plans, based on statements of industry officials and published reports.
Iowa is the second-largest agricultural state after California, and its annual soybean outputs also ranks No. 2, after Illinois state.
According to the ISA report, September soybeans on the Chicago Board of Trade closed 31 cents higher per bushel on May 22 since the US and China decided to put their brewing trade war on hold.
"That tells me the trade is optimistic something will get done and trade lanes will open for US soybeans into China again," Jim Sutter, US Soybean Export Council CEO, was quoted as saying. "I feel much more optimistic that will happen than two weeks ago."
China is the world's biggest buyer of US soybeans, according to the US Department of Agriculture. Last year, it imported 27.5 million tonnes of soybeans valued at around US$14 billion.