China may miss ‘phase one’ target for U.S. farm purchases
The “phase one” agreement that de-escalated the China-U.S. trade war calls for China to greatly expand its purchases of U.S. food, agricultural and seafood products this year and in 2021. Former USDA chief economist Joe Glauber said on Tuesday that China will have to accelerate sharply its purchases to meet that goal.
“I think we will be lucky to get the 2017 level of sales,” said Glauber during a farmdoc Daily webinar. In February, the USDA forecast agricultural exports of $14 billion to China this fiscal year. The “phase one” agreement considers the 2017 “baseline” for sales to be $24 billion.
China has reported imports of $5 billion of U.S. agricultural products during the first three months of this year. China would need to double that volume, to $10 billion, for the remaining three quarters of the year to reach the target of $36.5 billion this year, said Glauber. Sales of pork, cotton, wheat, corn, and sorghum are encouraging, but the pace is very slow, he said. Few large sales of soybeans, usually the largest farm export by far to China, have been reported. Glauber said China traditionally buys U.S. soybeans at harvesttime, when prices are lowest. “I don’t think we’ll see many sales or shipments until late summer.”