China will make good on a pledge to purchase more than $40bn per year of US agricultural products under the recently agreed Phase 1 trade deal between the two countries, China’s top agriculture consultancy said yesterday.
Chinese purchases of agricultural goods are expected to increase to $40bn to $50bn annually over the next two years under the deal aimed at resolving the long-running trade war between the world’s top two economies, according to US Trade Representative Robert Lighthizer.
The deal has yet to be signed, fuelling scepticism over whether China will be able to import such a large amount of US farm products.
“Most foreign media don’t believe that China can fulfil the commitments,” Shanghai-based consultancy JCI wrote in a note. “But as a Chinese consultant company on (the) agricultural market, JCI strongly believe that China has the ability and will fulfil its promise.”
JCI estimates China can buy a total of roughly $41.3bn worth of US farm products annually, including around $18.7bn – or 45mn tonnes – of soybeans.
Soybeans have been hit heavily by Chinese tariffs on US goods in the tit-for-tat trade row, hurting US soy farmers who depend heavily on the Chinese market.
China’s soybean imports from the United States last year halved from 2017 to 16.6mn tonnes, the lowest annual total since 2008.
JCI’s projections were based on a “careful study” of China’s import volume of US farm products in the past and assume favourable weather and pricing throughout, said the company.
It noted that China’s US soybean imports hit a record high of 33.66mn tonnes in 2016.
JCI expects another $2.1bn will come from 1mn tonnes of frozen meat and offal imports, while sorghum, corn and distillers’ grains imports will reach about $1.8bn each.
It did not include volumes bought for state reserves. Wheat shipments will hit $1.4bn, chicken feet imports will reach $1.1bn – which would mark a 257% increase from the previous record – and nut purchases will rise to $2.5bn, it said.
The biggest amount of nuts China ever bought from the United States was $391mn in 2012, according to US export data.
from Gulf Times https://ift.tt/34GEwxz
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