You are here
After record corn sale to China, Perdue expects ¡®a big shipping season this fall¡¯
China is far short of meeting its ¡°phase one¡± commitment to buy huge amounts of U.S. food and ag exports, but Agriculture Secretary Sonny Perdue said, ¡°We expect a big shipping season this fall¡± ¡ª China¡¯s preferred shopping period for American grain. On Thursday, Chinese companies made one of the largest corn purchases in half a century of USDA records.
Grain sales to China have picked up in recent weeks, providing moments of continuity amid rising tensions between the world¡¯s two largest economic powers. Secretary of StateMike Pompeodescribed the Chinese Communist Party as ¡°the central threat of our times¡± during a Senate hearing on Thursday. The nations recently ordered each other to close a consulate, and although the ¡°phase one¡± agreement de-escalated the dispute, the Sino-U.S. trade war remains unresolved.
Exporters reported the sale of1.937 million tonnesof U.S. corn for delivery to China during the marketing year that opens on Sept. 1. It was the third-largest corn sale to any country and the largest ever to China. The sale came two weeks after Chinese firms bought 1.762 million tonnes of U.S. corn, a deal that ranked No. 5 on the USDA¡¯slist of largest corn salesever.
¡°Lots of potential to grow our ag sales to China ¡ª we expect a big shipping season this fall,¡± saidPerdueon social media.
¡°China has a long way to go,¡± said Seth Meyer, associate director of the FAPRI think tank at the University of Missouri.
¡°Phase one¡± calls for China to import $36.6 billion worth of U.S. food, agricultural, and seafood products this year. ¡°Through June 2020, China¡¯s imports of covered agricultural products were $8.7 billion,¡± said thePeterson Institute for International Economics. That would require imports of nearly $28 billion in the final six months of the year to meet the goal.
¡°The product has to make it there in the calendar year,¡± said Meyer. ¡°While these are good-sizecorn purchases by the Chinese, we don¡¯t know when they will go (or) if this is a political move to get phase one products ¡®on the books¡¯ even if not shipped.¡±
China was the largest customer for U.S. farm exports before the trade war began in mid-2018, disrupting and reducing exports overall. In late May, the USDA estimated that ag sales to China would total $13 billion in the fiscal year ending Sept. 30. Trump administration officials, including U.S. trade representative Robert Lighthizer, say a wave of purchases in the fall will lift China to meeting its ¡°phase one¡± pledge.
Meanwhile,Kevin Ross, president of the National Corn Growers Association, said the farm group will seek ¡°aggressive expansion¡± in exports. ¡°We¡¯re thankful to have USMCA in force and phase one deals with Japan and China. But we have lost ground to our competitors,¡± he said. ¡°NCGA will continue to push for trade agreements in Southeast Asia and other regions with strong demand potential.¡±