USDA Secretary unsure if coronavirus will slow China’s farm imports

USDA Secretary Sonny Perdue says he does not know if China’s coronavirus outbreak will upset Beijing’s pledge to increase purchases of American farm goods as part of the bilateral trade deal between China and the United States.
calendar icon 30 January 2020
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According to reporting from Reuters, the coronavirus has cast doubt on China’s ability to purchase $36.5 billion in US agricultural goods in 2020. Commodity traders were already questioning the commitment as rival soybean supplier Brazil reports a better than expected harvest and ASF curbs Chinese demand for soy used to feed livestock.

In the trade deal signed on 15 January, China agreed to buy at least $12.5 billion worth of US farm products in 2020 and at least $19.5 billion in 2021. However, US futures prices have dropped by 5 percent for soybeans and 8 percent for pork. This is largely because China, the world’s biggest soybean importer and pork consumer, has failed to make major purchases of the commodities.

Agricultural producers are worried that China’s demand will temporarily suffer as the government has quarantined cities to contain the recent outbreak of coronavirus. Delays or reductions in China’s planned purchases could put additional pressure on US farm incomes – putting further strain on farmers who have withstood the bruising trade war between China and the US.

“It obviously is going to have some ramifications economy-wide, which we hope will not inhibit the purchase goal that we have for this year,” Perdue told reporters on a conference call.

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