Chinese delegates signed the second largest U.S. soybean purchase agreement in Des Moines Thursday. Chinese grain buyers agreed to purchase 12.53 million tonnes, or 460 million bushels, of U.S. soybeans.
Member of the Chinese delegation, representing the Shanghai Branch of Shandong Bohi Industry Company, Jeffrey Xu said the demand for U.S. soybeans continues to increase.
“We see the U.S. soybean for the quality, especially for the protein. When the protein is higher, we have better quality, so we prefer to import more U.S. soybeans,” Xu said.
Xu described U.S. soybeans as a sustainable and reliable product for China’s crushing industry. The largest buy occurred in 2015 when Chinese importers signed a nonbinding agreement to buy 13.18 million tonnes U.S. Soybeans.
Iowa Secretary of Agriculture Bill Northey said the Chinese delegation’s purchase impacts those on the farm.
“The first thing you think about is the impact on folks back on the farm. “That demand impacts farmers eventually,” Northey said. “Think about how that demand has grown over the last twenty years. China continues to buy more soybeans every year. Today’s number ends up being much larger number than it use to be, and it is something that sometimes surprises us farmers as to how big that number is. I’m excited for the impact on producers.”
Northey also said the trade relationship between China and the United States provides an opportunity for a more profitable market.
“Without the market here, we’d be in much tougher shape out on the farm,” Northey said. “Think back to those producers and how excited they are to be able to have this in Iowa, and have this kind of news that not only gives a sense of how these beans are getting sold now, but a reminder that this market is going to be there too.”
Demand is based on eggs, pork and fish production in China. Northey continued saying demand will continue as they continue to purchase beans and certainly a large portion from the U.S.
Other items purchased at the ceremony include 371 metric tons of pork and beef. The entire purchase totaled over $5 billion.