China's top agricultural market consultancy JCI announced today that the government in Beijing would do well to promise the USA the purchase of agricultural commodities worth at least USD 40 billion per year. This is to be contractually regulated in an initial agreement for a trade agreement between the two economic giants at the beginning of January.
It states that China will make a commitment to the USA to purchase agricultural goods worth USD 40 - 50 billion p.a. over the next two years. This is intended to de-escalate the long-running trade conflict.
Many market observers doubt that China has such a high import requirement for agricultural goods at all.
However, the Shanghai-based consultancy JCI, which also advises the government in Beijing, is firmly convinced that China not only has the ability to buy so many agricultural goods, but also the firm intention to fulfill the contracts in full.
JCI calculates that China will buy around USD 41.3 billion worth of US agricultural goods. This includes 45 million tons of soybeans worth USD 18.7 billion. Last year, soybean imports from the US halved compared to 2017 because China used its reluctance to buy as a bargaining chip in the trade conflict.
The forecast is based on a cautious assessment and the experts are assuming normal weather conditions and average prices, they say. China could then even significantly exceed imports from 2016, when a record 33.66 million tons of soybeans were imported from the US.
Other products would include 1 million pork and offal worth USD 2.1 billion, sorghum, corn and DDGs, which would cost USD 1.8 billion each. Quantities were not specified.
US wheat worth USD 1.4 billion is also on the list, as well as chicken legs worth USD 1.1 billion and nuts worth USD 2.5 billion.
Source
HANSA Terminhandel
