March 5, 2020

US Agriculture Secretary predicts China will purchase US soybeans in late spring and summer

The prediction by Sonny Perdue, US Agriculture Secretary comes as China pledged to purchase additional agricultural goods from the United States as part of the US-China Phase 1 trade deal reported Reuters.

In 2017, more than half of soybeans from the United States were purchased by China. This stopped when the trade war began, and is projected to be a key part in China's additional purchases.

However, traders and farmers are uncertain if China will buy more US agricultural goods.

Purdue said China will purchase soybeans in late spring and summer as they purchased Brazilian soybeans this time of year. Purdue was testifying before Congress.

As part of the US-China Phase 1 deal, China will buy an extra US$12.5 billion worth of US agricultural goods this year, and another US$19.5 billion next year over the US$24 billion purchased in 2017.

Demand for soybeans have dropped as China is battling an African swine fever outbreak, which has decimated its herd and lowered the need for soy as swine feed. The new COVID-19 outbreak may also affect China's economic growth.

US President Donald Trump said US farmers will be provided with additional funds until trade deals conducted with China, Canada, Mexico and other countries take effect. A US$16 billion aid package was prepared for farmers last year, and US$12 billion in 2018.

Last month, China said it will make exemptions on retaliatory duties that were imposed in the trade war on US goods. This includes soybeans.

-      Reuters