U.S. Ag Exports to China on the Rise, But Not at Phase One Pace
China is stepping up its purchases of U.S. farm exports, but it will not meet the ambitious sales goals of the “phase one” agreement that de-escalated the Sino-U.S. trade war, said USDA data on Wednesday. In a quarterly forecast, USDA analysts said China, the farm sector’s No. 1 customer before the trade war, will remain locked in third place as an export destination in 2021, behind Canada and Mexico.
The USDA estimated ag exports to China will total $14 billion this fiscal year, which ends on Sept. 30, and $18.5 billion in fiscal 2021. The phase one deal called for China to import $36.6 billion worth of U.S. food, agricultural, and seafood products this calendar year.
“You’re not going to make it. The calendar year falls between $14 (billion in fiscal 2020) and $18.5 (billion in fiscal 2021),” said Joe Glauber of the IFPRI think tank and former USDA chief economist. “Their forecast suggests … (China is) going to fall far short of meeting their calendar 2020 target.”
Separately, the Peterson Institute for International Economics said China imported $9.9 billion worth of U.S. food, agricultural, and seafood products in the first seven months of 2020, or a bit more than a quarter of the target. China prefers to buy during the U.S. harvest, when prices tend to be lowest, and there is hope that a flurry of purchases this fall will lift China to the phase one target.
So far this week, private exporters have reported the sale of 604,000 tonnes of soybeans and 408,000 tonnes of corn for delivery to China in the marketing year beginning on Sept. 1. China has been active in the U.S. market since mid-July.
A coronavirus slump will limit U.S. farm exports to $135 billion this fiscal year, the lowest total in four years, but a global economic recovery will bring a spurt in sales to $140.5 billion in fiscal 2021, said the USDA in its first export forecast for the new year. “This increase is primarily driven by higher exports of soybeans and corn,” said the Outlook for U.S. Agricultural Trade. “Soybean exports are forecast up $4.2 billion … largely due to expected strong demand from China and reduced competition from Brazil.”
Canada would be the No. 1 market in 2021, with purchases of $21 billion, followed by Mexico, at $19.3 billion; China, at $18.5 billion; Japan, at $11.8 billion; and South Korea, at $7.7 billion. That would be the same order as this fiscal year.
At $18.5 billion, sales to China would be near their level before the trade war.
Source: Agriculture.com