Perdue tempers optimism on ‘phase one’ ag sales to China
Five weeks after saying he was hopeful China would import $36.6 billion of U.S. food, agricultural and seafood products this year, Agriculture Secretary Sonny Perdue is less certain the target will be met. A spate of sales to China during August and September has raised hopes in farm country that the goal, set in the “phase one” trade agreement, would be met despite a slow start.
“I’m not sure they’re going to make it but they’re trying,” Perdue told farmers at a town hall meeting in Wisconsin, reported Reuters on Friday. “Non-agricultural trade issues get in the way.” It was not immediately clear which issues he meant.
Chinese customs data peg food, agricultural, and seafood imports at $11 billion through August, leaving $25 billion to reach Chinese ports in the final four months of this year if the target is going to be met, according to a think tank. USDA analysts have been less sanguine than high-level Trump administration officials about a boom in Sino-U.S. farm trade. They forecast farm exports to China of $18.5 billion in fiscal 2021, which opened on Oct. 1, following $14 billion of exports in fiscal 2020.
“I think both countries are uniquely committed to stick with this [phase one] agreement,” said Gregg Doud, U.S. chief agricultural negotiator, at an agribusiness conference in Kansas City a week ago. “Overall, you have to remember that it takes time … You’re just now seeing things kicking into gear.”
China prefers to buy when market prices are lowest, so it tends to buy U.S. farm products at harvest time. Because of that pattern, U.S. officials such as Trade Representative Robert Lighthizer have predicted a blizzard of sales late in the year will lift China to the phase-one goal. The world’s most populous nation was the No. 1 customer for U.S. farm exports before the trade war, with purchases averaging nearly $22 billion a year. It now trails Canada and Mexico.
At the end of August, Perdue noted that China had “really stepped up” its purchases of farm exports and said he was hopeful of compliance with the phase-one goal. “They are saying … the right things about their desire to fulfill their commitment,” said Perdue, speaking to the National Association of State Departments of Agriculture. “And I believe they have the capacity. China imports a lot of things.”
Doud held a similar view about the possibility of expanding the U.S. market share in China, the world’s leading ag importer. The phase-one agreement calls for $80 billion in U.S. sales over a two-year period “Going … to $40 billion, to me is a no-brainer,” he said.