Agricultural experts say that if a new trade agreement is signed soon, U.S. soybean sales to China may rebound rapidly.
Wallace Tyner, a professor of agricultural economics at Purdue University, said that China bought soybeans from Brazil during the U.S.-China trade negotiations, but the speedy resolution of the trade disputes will allow American farmers to regain market share without causing long-term damage.
Tyner said that most of the U.S. soybean crops were in stock last year. If the trade agreement requires to increase soybean purchases by the Chinese government, these soybeans can be quickly shipped to China. This year’s corn will be harvested in October, leaving plenty of time for the sale and shipping of existing stocks.
In late February, Trump said that he and Chinese President Xi Jinping had made “substantial progress” in reaching a trade agreement and announced that he would postpone the U.S. tariff escalation threat that was scheduled to take effect on March 2. The announcement of the trade agreement may be coming soon.
West Higginbothom planted 4,000 acres of soybeans in Arkansas, about 25 miles southwest of Memphis, Tennessee, and currently serves on the Arkansas Soybean Promotion Board. He said he and other farmers are optimistic about reaching a new trade agreement with China, and many farmers hold grain and see if prices rebound. The settlement of the dispute will give Higginbothom plenty of time to choose this year’s crop and ensure production financing
The negotiations have helped create a good environment for the two countries’ soybean trade.
Reuters quoted two informed traders as saying that Chinese state-owned companies bought at least 500,000 tons of U.S. soybeans.
The report said that it is the first time China has ordered soybeans since the U.S. Agriculture Minister Sonny Perdue said on his personal Twitter account on February 22 that China has promised to purchase another 10 million metric tons of U.S. soybeans.
He Weiwen, an executive council member of the China Society for World Trade Organization Studies, hailed these signals issued by the Chinese side, saying it showed China’s sincerity in expanding imports from the United States.
He said that this shows that China is “taking action” to resolve the trade deficit between the two sides, adding that this will create a good environment for the two countries to promote trade negotiations.