© Reuters. A worker carries a sack of soybeans at a food wholesale market in ShenyangBy Benjamin Kang Lim and Dominique Patton
BEIJING (Reuters) – China will commit to buy more U.S. soybeans during President Donald Trump’s visit to Beijing this week, a U.S. industry official said, underlining the importance of trade in farm goods even as tensions grow between the world’s top two economies.
China is the world’s biggest soybean importer and the U.S. is its second largest supplier.
Chinese soybean buyers will sign a letter of intent with the U.S. Soybean Export Council committing to purchasing a certain volume of soybeans in the future, Paul Burke, the body’s North Asia regional director, told Reuters by phone on Tuesday.
He declined to disclose the volume of beans to be included in the agreement. But Chinese importers said in July they would buy 12.53 million tonnes of U.S. soybeans, the second largest such agreement.
The volume under the new deal will be “much less” and will reflect orders due to be signed in the current marketing year that were not included in the July agreement, said Burke.
But China will also promise to buy more U.S. soybeans in future, according to a source familiar with the plan.
A signing ceremony is scheduled to take place as Trump meets Chinese President Xi Jinping.
China will also promise to buy more U.S. beef, barley and dairy products, including cheese, the source said. China dropped a 14-year ban on U.S. beef imports this year.
Agriculture trade has been a bright spot in U.S.-China relations under Trump’s administration, unlike other sectors such as steel and aluminum where the two countries have faced disputes.
A separate purchase agreement between a Chinese firm and a U.S. agricultural products exporter will also be signed, said Burke, adding he was not aware of details.
Major grains trading house ADM (N:) was on an initial list seen by Reuters of U.S. companies taking part in a trade mission accompanying Trump to China but ADM has not confirmed its participation.
The U.S. sold 20.7 million tonnes of beans to China in the first nine months of this year, up 14.8 percent from a year ago. In 2016, it sold 38.2 million tonnes, or 40 percent of China’s total soybean imports.
China is expected to import 96 million tonnes of soybeans in the 2017/18 marketing year, up from 93.5 million tonnes previously, according to the China National Grain and Oils Information Centre, an official think-tank.
The dealmaking comes as U.S. farmers seek to export more beans after growing another record crop but with top exporter Brazil set to steal a share of their sales during the peak selling season.
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Source: Investing.com
