As part of the Phase 1 deal signed in January, China promised to increase purchases of US agricultural goods by at least $12.5bn in 2020 and $19.5bn in 2021, over the 2017 baseline.
Agricultural goods include oilseeds, meat and other agricultural commodities.
“The Chinese have been delivering on all their commitments to remove non-trade barriers and to improve the ability of both countries to trade. I do believe they have the intention to comply,” said ADM CEO, Juan Luciano, during the virtual BMO Capital Markets Global Farm to Market Conference on Wednesday [May 13].
Procurement of US soybeans by China has been increasing in the past few weeks.
In the week ending April 30, 2020, US soybean shipments to China totaled 12.6MT and 21.6MT to the rest of the world, up 4% on 2019, but 22% lower than in 2017, reported the USDA. Sales grew more than 400,000 tons from March on higher sales to China.
Lower commodity prices due to the coronavirus pandemic may limit the value of China’s first year US agricultural product purchases.
Soybean and meal export prices
Both soybean and meal export prices have experienced a downturn since the beginning of April in response to rapidly changing market forces due to the COVID-19 global pandemic, noted the USDA.
US Gulf FOB soybean export bids in April averaged $337/ton, down $8 from March. Brazil Paranagua FOB averaged $334/ton, down $6. Argentina Up River FOB averaged $326/ton, up $2.
Meal export prices dropped at a fast pace for the month as demand fell in response to meat processing facility closures and shrinking livestock herds.
US soybean meal export bids in March averaged $349/ton, down $12 from March. Brazil Paranagua FOB averaged $319/ton, down $18 from March, and Argentina Up River FOB averaged $328/ton, down $20.