CHICAGO (Reuters) – US farmers bought the Trump administration notice that US agricultural sales could have increased significantly to China on Friday but warned that they needed to see follow-up purchases.
Treasury Secretary Steven Mnuchin said the agricultural purchases could increase up to $ 40 billion – $ 50 billion a year as part of a partial trade deal, which could be more than double the $ 24 billion in agricultural products and related products bought by China from the US in 2017.
Farmers, who relied on China as the best purchaser for soybeans and sormas of the United States and as an important market for pork and dairy, saw their incomes during the 15-month conflict involving tariffs between the world's two largest economies.
“I'm excited,” said Monte Peterson, a farmer in the City Valley, North Dakota, of the first stage of trade deal. “This is a good announcement for the United States.”
It will be important that China takes delivery of US farm products and not advertise purchases, but Peterson said.
“We have to see it,” he said. “We must see it loaded and put out.”
At a news conference following talks with Chinese Prime Minister Liu, US President Donald Trump said the partial discussion meant that farmers would have to work a lot of overtime. ”He did not Mnuchin details about China's promised products.
“We are encouraging the story of trade dealings with China and look forward to learning the data,” Tyson Foods (TSN.Nspokesman Gary Mickelson said.
In July 2018, China added an additional 25% compensatory tariff on soybeans, resulting in untapped crops of untapped crops selling prices to multi-annual years. Trump has pledged a $ 28 billion relief package to compensate farmers, who voted widely in 2016.
“Our farmers are resilient, but they need a long-term solution in this trading war where all soy U. importers can be imported into China with no revenge tariffs,” said Jim Sutter, CEO of the Soy Beans Export industry group. .
China is mainly dependent on Brazil and Argentina for soybean imports that it uses to feed livestock for almost a year and a half, but the pre-contract could transfer trade flows to the United States. However, South American growers said that stability would be needed to deal with global markets.
“If they reach an agreement, it will be much easier for Brazilian soybean farmers to make projections and calculations,” said Cayron Giacomelli, a soy producer in Mato Grosso state.
China has increased the purchase of US pork ahead of the Washington trade talks, and the US government reports major weekly export sales on Thursday. Millions of Chinese pigs have died from a fatal disease in recent months, China's launch of a global pork buying spree.
MAJOR DOLLAR FIGURES
The economist Bill Lapp, president of Omaha, Advanced Economic Solutions, based on Nebraska, was suspicious about the figure up to $ 50 billion.
“We've seen these big dollar figures before, and they don't always come to fruition,” he said.
Soybean prices concentrated to the highest point since the trade war began before Friday's announcement. Trump said it will take up to five weeks to get a written agreement.
“We are motivated to have both sides at the negotiating table because it is important to reopen this market to American farmers,” said Cargill Inc, a global commodity trader, in an email statement.
China imported over 13 million tonnes in the 2018/19 marketing year ending 31 August and bought nearly 5 million tonnes more in the current season, according to government data. The sales were far less than 30 million tons or more China's annual imports from the US before the trade war.
While Mnuchin told the reporters Trump agreed not to increase tariffs for $ 250 billion of Chinese goods to 30% from 25%, there was no reference to the removal of tariffs that were in place with more and year.
The Farmers for Free Trade advocacy group said it was too early to celebrate dealings.
“The commitment to additional purchases is welcome but the timeline, price, commodity and many other issues need to be answered,” said Brian Kuehl, the group's joint director in a statement.
Reporting by Tom Polansek, Karl Plume, Julie Ingwersen and Mark Weinraub in Chicago; Additional reporting by Ana Mano in Sao Paulo Writing with Caroline Stauffer; Edited by Matthew Lewis
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