Trump says China soybean purchase a 'fantastic sign of faith'

Workers transport imported soybeans at a port in Nantong, China, on April 9, 2018.
Workers transport imported soybeans at a port in Nantong, China, on April 9, 2018.PHOTO: REUTERS

WASHINGTON (BLOOMBERG) - China, the world's largest buyer of soybeans, is expected to keep purchasing United States supplies as trade negotiations between the two countries continue, President Donald Trump said from the Oval Office.

"They started on a smaller scale, and today they're starting very big, and I very much appreciate that," Mr Trump said. "It's a fantastic sign of faith."

China is expected to purchase five million tonnes of US soybeans, Mr Trump said. That would be on top of the estimated five million bought in the weeks after Mr Trump met his counterpart Xi Jinping in December in Argentina.

"That's a tremendous purchase, which will take place now and our farmers are going to be very happy," Mr Trump said.

"On behalf of our agricultural industry and on behalf of our farmers, frankly, we appreciate it very much. That's a very big order."

China usually buys 30 million to 35 million tonnes a year from the US.

The countries have been holding talks in Washington, and Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer will travel to Beijing to continue negotiations.

 

China, usually a top buyer of US soybeans, slapped retaliatory tariffs on American supplies in mid-2018. After that, US exports to the Asian country plummeted while shipments from Brazil surged. Prices in the US fell, while premiums in Brazil jumped. Prices in the Americas have since come closer to parity.

While China signalled an increase in purchases of US agricultural goods, analysts, traders and farmers have said the amounts may not be enough as soybean inventories pile up.