Since China became a member of the World Trade Organization (WTO) in 2002, countries have been wondering how they would change the dynamics of trade.
The first 15 years showed rapid growth in Chinese income and much stronger demand for protein, both plant and animal.
Now that the United States is pushing back on their trade practices?China is heading to another country to buy land, to grow soybeans. World food politics make strange bedfellows.
First, the latest on U.S./China trade talks to end the tariffs and resume normal trade?.nothing.
Reuters says the two sides met last week with low expectations of progress and no further talks are scheduled at this time. A source close to the negotiations told Reuters that Chinese officials have raised the possibility of no further talks until after the U.S. elections in November. The lack of progress adds to uncertainty for businesses who now have to weigh the risks when considering investments in the U.S. or China. A new round of tariffs could take effect as early as September. There?s no guarantee they?ll be the last tariffs or that there won?t be other measures taken as well.
Soybeans represent U.S. farmers? single largest agricultural export to China, which takes approximately 60-percent of the world?s supply every year.
Brazil is now the go-to country for soybeans, but China wants more sources so they are buying 2.5 million acres from Russia for soybean production.
The Washington Post says the Kremlin will offer roughly 2.5 million acres of arable land to foreign investors. Analysts are describing it as a bid to replace the U.S. as China?s most reliable soybean supplier.
The Post article says Chinese officials are making plans to trim around seven million soybean tons off of the nearly 33 million tons it?s been buying annually from U.S. farms.
Beijing?s cut in American purchases as sent U.S. bean future prices tumbling.
Today, the USDA is expected to announce a program for the U.S. government to reimburse farmers for those losses at a rate of approximately $1.65 per bushel.
