China has agreed to make unspecified new purchases of farm products from the United States, President Donald Trump said after meeting his Chinese counterpart Xi Jinping in Japan.
China was the top buyer on average of U.S. agriculture exports from 2010 to 2017, making purchases worth $21.6 billion a year, U.S. Department of Agriculture (USDA) showed.
While investors await details of the agreement and confirmation from China, analysts and traders say there are limits to how much more China can buy from the country that is typically one of its top suppliers of soybeans, grains and meat.
Below are details of where future Chinese purchases could rise.
SOYBEANS
The United States is usually China’s No. 2 supplier of soybeans, a product likely to make the list of new purchases even though an African swine fever epidemic in China has dented demand from Chinese pig farmers.
Soybean imports in the 2019/20 crop year are forecast by USDA at 87 million tonnes.
The USDA reported a large soybean sale on Friday of 544,000 tonnes to China, an apparent goodwill gesture a day before Trump and Xi met for the first time in seven months.
There could be a few more similar purchases in coming months as tensions ease, said Darin Friedrichs, senior Asia commodity analyst at INTL FCStone.
But any large deals were expected to be conditional on progress in talks and would be made over a long timeframe, he added.
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