On the occasion of a new round of trade talks between the US and Chinese high-level leaders this week, the US said that last week’s soybean exports to China hit a five-month high. But this batch of soybeans was ordered a few months ago, and China has not yet purchased a new single US soybean.
The US Department of Agriculture said on Monday that as of July 25, the United States had tested nine batches of about 600,000 tons of soybeans exported to China, the most in a single week since mid-February.
However, the US data shows that the above-mentioned soybeans are purchase contracts set by the two countries before the negotiations broke down in May. China has not yet set a new US soybean purchase after the talks. At the G20 summit in Japan at the end of June, China said it would purchase US agricultural products on a large scale, while the United States said it would not impose new tariffs for the time being.
White House economic adviser Kudlow said on Friday that he would “not expect to reach any big deal” when he said this week at high-level trade talks in Shanghai. The negotiators will try to “reset the stage” and return the negotiations to the end of May.
Kudlow told CNBC that he hopes China will continue to complete the “large-scale procurement of US agricultural products and services.”
China is the largest export market for US soybeans, with an annual average of more than 30 million tons of soybeans purchased from the United States. Since China imposed a 25% tariff on US soybeans more than a year ago, China’s US soybean imports fell to about 14.3 million tons in 2018/19, an 11-year low.
As of June 1, US soybean stocks reached a record 49 million tons, soybean prices fell sharply, and farmers’ incomes were threatened.
Peter D. Goldsmith, a professor of agricultural and consumer economics at the University of Illinois, told VOA that among the political wranglings of the United States and China, Midwestern farmers are the first to bear the brunt.
“The Midwestern farmers basically grow two crops – corn and soybeans – so the reduction in demand for soybeans puts a lot of pressure on the corn, which in turn increases the supply of (corn) and drives down prices,” Goldsmith said.