NEW YORK • Seven months after the United States and China signed a preliminary agreement to temper their trade war, Beijing’s purchases of American agricultural goods have yet to reach the deal’s target.
As President Donald Trump readies for a tough re-election battle in November, US media has reported that the two sides are set to meet from Aug 15 to discuss the deal, which calls for China to sharply increase its buying of American goods and services this year and next.
But according to data compiled by the Peterson Institute for International Economics (PIIE), Chinese agricultural purchases at the end of June were far from where they should be at this point in the year. They had reached only 39 per cent of their semi-annual target, according to US figures, or about 48 per cent, based on Chinese figures.
“If we get back to what the level of trade was in 2017, we’ll be lucky,” said PIIE senior fellow Chad Bown, who authored the study, referring to the year the trade war began.
Under the deal’s terms, China agreed to buy an additional US$32 billion (S$44 billion) worth of US agriculture products over the next two years from 2017 levels.
Chinese orders for corn and soya beans have risen since the middle of last month, with Beijing buying just over three million tonnes of American oilseeds between July 14 and Aug 7, according to data from the US Department of Agriculture.
At the end of July, the US saw the largest-ever daily order by China for corn, of 1.9 million tonnes.
The announcements came as a relief to US farmers, who are expecting a bumper crop this year and need buyers to take it.
The Chinese “realise that we are not being the best of buddies right now, but they need the products and they are gonna take as much as they need”, said Mr Jack Scoville, an agricultural market analyst for Price Futures Group.
But analysts warn that any orders could still be called off.
Brazil and Argentina, two of the world’s largest soya bean and corn producers, are starting their harvests next spring, said Mr Brian Hoops, president of the brokerage firm Midwest Market Solutions.
China “could cancel all these purchases they made in July and buy at much cheaper prices if that’s available to them”, he said.
The sharp global economic downturn caused by the coronavirus pandemic has, meanwhile, badly hit international trade.