China has been ramping up its corn and soybean purchases in recent weeks, but USDA's latest trade data show Chinese imports through July this year are still below 2018 levels and are far from the pace needed to meet goals set in the “phase one” trade pact.
China imported roughly $7.719 billion worth of U.S. agricultural products from January through July, not counting forestry products, putting the pace above last year, but still below levels in 2018, when the trade war between the U.S. and China kicked off.
The latest total for the first seven months of the year, as calculated by USDA’s Foreign Agricultural Service, shows China imported about $1.15 billion worth of U.S. ag goods in July, but the pace needs to be higher if China is going to buy the $36.5 billion worth of ag products that it promised.
“I look at the pace we need to meet ‘phase one’ and we’re about 44% below the needed pace,” said John Newton, chief economist of the American Farm Bureau Federation. “We should probably be close to $14 billion in sales (through July) if we were going to hit the ‘phase one’ targets. New crop sales will certainly help.”
Newton puts the target a bit lower, at $31.025 billion, because he subtracts freight and insurance cost from the $36.5 billion total.
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The only time China came close to importing $14 billion of U.S. ag commodities in the first seven months of the year was in 2012, according to Farm Bureau calculations. Back then, the seven-month total was $13.2 billion.
Still, China’s corn and soybean purchases have been rising quickly in recent weeks for delivery in the 2020-21 marketing year, which began Tuesday. That is expected to translate into a substantial boost in physical exports.
So far just this week, USDA has announced sales of 1.192 million metric tons of new crop U.S. corn to China. That’s on top of a single-day sale announcement on Aug. 27 by USDA of 747,000 tons of corn to China for 2020-21.
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