WASHINGTON D.C. - The pace of Chinese purchases of U.S. agricultural commodities has picked up in recent weeks.
Industry experts are speculating that the Asian nation is trying to catch up on its Phase One Trade Agreement obligations.
Ben Kasch is an account executive with Bower Trading and says there may be more to it than just Phase One.
“That’s the question; is it politically driven from the Phase One or is it fundamental because they’re having production issues and maybe a food crisis on their hands too? They’ve had some weather issues that we haven’t really talked about until they started buying here. They had a dry region in the North China plain that’s a major growing region. China’s a huge country, so they grow all kinds of crops across many, many acres. They’re the second-largest wheat grower and the second-largest corn grower.”
Kasch says flooding is also affecting a good chunk of China’s main crop-growing areas thanks to ten to 19 inches of rain in certain areas.
“Anything’s possible, especially with the dollar down now. If the dollar was staying up around that par level of 100, it would be really tough but I think there are some underlying production issues there, and then with the whole COVID situation we’re going through, food security is a lot of the government’s number one concern right now for their people. I think if they wanted to, China could definitely make a push at it. We have plenty of corn to get rid of; not a bumper crop but a large crop, probably over 15 billion bushels. We have enough corn to move, so it would be great if they’d get in here and start buying.”