Sinograin soyabean purchases signal US-China trade deal is struggling
May 22, 2020
The purchase by Chinese state-owned agribusiness COFCO and stockpiler Sinograin of hundreds and thousands of US soyabeans could indicate that the country’s trade deal with the USA is starting to struggle, AgriCensus reported on 12 May.
China had pledged to buy US$35-40bn worth of agricultural goods per year for the next two years but the purchases could indicate the trade deal is starting to fall apart, according to AgriCensus.
Although China relied on the USA for soyabeans, it was less reliant on the country for other agricultural goods and this was the area where a slowdown had started to become visible.
Following initial small increases in corn and wheat purchases, these had slowed due to the US comments about who was responsible for the COVID-19 outbreak.
China had purchased more than 1M tonnes of both grains in March but almost none in April.
For ethanol, first quarter exports of US ethanol to China had remained below the 2017 level, the baseline year for the trade deal.
An 11 May report in the Global Times, regarded as the unofficial mouthpiece of the Communist Party, quoted anonymous advisors as saying China could seek to redraft the deal to make it more favourable to Beijing.