China Set to Buy Record Volumes of U.S. Soybeans in Move That Would Meet Phase I Pledge
Low prices have attracted Chinese buyers who are set to purchase record volumes of U.S. soybeans in 2020. If realized, this move would meet China’s pledge under Phase I of the trade deal cemented between the two countries in January of this year.
Sources claim that China will likely buy 40 million tons of soy from the U.S. this year - 25 percent more than the beginning of the trade war in July 2017, and 10 percent higher than a previous record set in 2016.
During the trade war China has relied heavily on soy imports from Brazil. However, since Brazil’s crop is harvested early in the year, China has always historically turned its reliance to U.S. soybean shipments for the last four months of the calendar year.
Analysts are saying that a target of 40 million tons is slightly out of bounds, claiming that historically the highest purchase rates have maxed out at 9 million tons per acre, meaning that 35 million tons is a more realistic goal.
Despite ongoing tensions between the two countries, trade between the U.S. and China has appeared to improve, with China also buying a record amount of U.S. corn, making its largest purchase on record in late July when it bought 1.76 million tons.