China would have to buy $4.5 billion in U.S. farm commodities a month to meet its Phase One commitment, which is why U.S. Soybean Export Council CEO Jim Sutter said Monday he expected the Asian nation to fall short of its promises.
“As far as the actual trade goes, I think it’s unlikely that China will import half of the two-year commitment of the ‘phase one’ deal in the first year,” he said at the Ag Outlook Forum.
Following that statement at the Ag Outlook Forum, Jim went on to say that he expects China to fulfill it over 2 years and explained that the start of year #1 had been in the heart of the South American shipping season. He believes they are going to fulfill the Phase 1 agreement – which was a 2-year agreement and the plan was never that it would be done 50% in each year.
There is good news, however, as China has recently imported a record amount of U.S. crude oil and has also been making large soybean purchases.
Sutter predicted that the amount of soybeans imported by China would be about 36 million metric tons, the same as it did in 2016. However, he remains optimistic about the future. He expects China to fulfill its commitment over two years because the beginning of year No. 1 was in the heart of South American shipping season.
China committed to purchasing $80 billion in U.S. agriculture products in 2020 and 2021 as part of the deal.