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CHINA TO RAMP UP BUYING TO MEET US FARM GOODS IMPORT TARGET

With nearly seven months gone, an ambitious $36.5 billion target for Chinese imports of US farm goods this year may not be quite out of reach, but it’s looking like a big, big stretch, Hallie Gu and Karl Plume wrote for Reuters on July 30, 2020.

By end-May, imports were running behind 2017 levels - rather than 50% ahead as needed - and while orders for China’s main farm import, soybeans, have started to pick up, scorching levels of buying would be needed to hit the mark. Add in a rapid deterioration in US-China relations, an upcoming US election, a global pandemic and questions over just how much soybeans China actually needs, and farmers and analysts say it may be a stretch too far.


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


Beijing and Washington sealed their Phase 1 trade deal in January after two years of acrimony and a steep slump in imports by one of the biggest buyers of US agricultural goods. Analysts at the time expressed reservations about the farm goods target, which is a quarter above 2013’s all-time high of $29 billion. Still, Chinese buyers stepped up purchases this year of a range of farm imports, sealing record deals in corn and meat imports, 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.


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