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China Imports Still Not on Pace to Meet Phase One Targets

Earlier this week, Bloomberg News reported that, “China’s purchases of U.S. goods increased last month as the economy continued its recovery from the coronavirus shutdowns, but imports are still far behind the pace needed to meet the terms of the ‘phase one’ trade deal.

“By the end of May this year, China had only bought about 19% of the total purchase target of more than $170 billion for goods in 2020, according to Bloomberg calculations based on Customs Administration data. That means China needs to buy about $139 billion in the remainder of the year to meet the terms of the agreement signed in January.”

“China Has $139 Billion Mountain to Climb to Meet U.S. Trade Deal,” Bloomberg News (June 29, 2020).

The Bloomberg article added that, “China will have to increase purchases ‘significantly in the coming months to meet the buying targets,’ said Michelle Lam, greater China economist at Societe Generale SA in Hong Kong. But as long as China keeps buying, markets could stay calm, she added.

“While purchases of energy products are only at about 3% of where they need to be by year-end, there was a significant jump in the imports of those commodities in May. China imported more meat than in April or March, making up for a slowdown in soybean shipments, the data show.”

A separate Bloomberg News article this week reported that, “China suspended meat imports from more plants as the Asian nation continues to sow confusion in global agriculture markets by suggesting a potential link between the spread of coronavirus and food.

“Customs authorities suspended imports from plants in countries including Brazil, Canada and Germany, according to a notice on a departmental website. While China didn’t provide a reason for the suspension, most, if not all, of the facilities had one thing in common: Covid-19 outbreaks.

The country has taken some unexpected steps in recent weeks, stirring controversy when its companies asked food suppliers around the world to sign a document attesting their cargoes meet safety standards to ensure they aren’t contaminated with the virus. Exporting nations and regulatory agencies have pushed back, declaring there’s no evidence linking infections to food.

Meanwhile, Reuters News reported this week that, “Brazil is expected to export 11.9 million tonnes of soybeans in June, a 37% rise from the same month last year, as Chinese demand remains strong and ports operate normally amid the COVID-19 pandemic, industry group Anec said on Tuesday.

“Exports of corn from Brazil are seen at 774,850 tonnes in the month based on shipping data, Anec said in a report.

“Anec also raised its annual export projection for 2020 to 78 million tonnes of soybeans, up from a prediction of 73 million tonnes in April.”

The article added that, “China accounted for 72% of Brazil’s soy exports in the first half.”

 

Keith Good

Keith Good

Keith Good is the social media manager for the farmdoc project at the University of Illinois. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily FarmPolicy.com News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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