China may miss US farm import target for 2020

The ambitious $36.5 billion import target for US farm goods to China is falling further out of reach after seven months of disputes.
calendar icon 30 July 2020
clock icon 7 minute read

Amid the economic imbalance, the diplomatic relationship between China and the United States is rapidly deteriorating. The upcoming US election and tensions over the start of the COVID-19 crisis are also adding to the rancour. The situation has left farmers and analysts doubting that China will meet its target.

“It just doesn’t seem likely to me,” said John Payne, senior futures and options broker with Daniels Trading in Chicago. “If the global economy was more normal then maybe, but you have this whole COVID problem.”

The United States and China finalised the Phase 1 trade deal in January 2020 after two years to tension and a steep slump in imports, with US farm goods being particularly affected.

When the deal was agreed, analysts expressed some reservations about the agriculture targets – it is a quarter above the all-time high of $29 billion set in 2013.

However, Chinese buyers stepped up purchases in 2020 on a wide range of imports, especially for meat, prompting some optimism.

“If I were to grade them today, we went from a C- to a B, and if it continues maybe we can start to see higher levels. But it needs to be a continual, ongoing affair,” said Dan Basse, president of AgResource Co in Chicago.

Amid the uncertainty, Reuters reports that many farm imports may find it hard to maintain their early trajectory.

In total, China’s American farm purchases reached $6 billion through May 2020, up just 9.1 percent from the same period in 2019 and 31 percent below 2017’s level.

Read more about this story here.

Amid the economic imbalance, the diplomatic relationship between China and the United States is rapidly deteriorating. The upcoming US election and tensions over the start of the COVID-19 crisis are also adding to the rancour. The situation has left farmers and analysts doubting that China will meet its target.

“It just doesn’t seem likely to me,” said John Payne, senior futures and options broker with Daniels Trading in Chicago. “If the global economy was more normal then maybe, but you have this whole COVID problem.”

The United States and China finalised the Phase 1 trade deal in January 2020 after two years to tension and a steep slump in imports, with US farm goods being particularly affected.

When the deal was agreed, analysts expressed some reservations about the agriculture targets – it is a quarter above the all-time high of $29 billion set in 2013.

However, Chinese buyers stepped up purchases in 2020 on a wide range of imports, especially for meat, prompting some optimism.

“If I were to grade them today, we went from a C- to a B, and if it continues maybe we can start to see higher levels. But it needs to be a continual, ongoing affair,” said Dan Basse, president of AgResource Co in Chicago.

Amid the uncertainty, Reuters reports that many farm imports may find it hard to maintain their early trajectory.

In total, China’s American farm purchases reached $6 billion through May 2020, up just 9.1 percent from the same period in 2019 and 31 percent below 2017’s level.

Read more about this story here.

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