China becomes top ag market
China passed Canada as the top market for U.S. ag exports in 2011. As recently as 2004, China’s purchases totaled only $6 billion, making it our fifth-largest ag export market. In the fiscal year that ended Sept. 1, the world’s largest importer of cotton and soybeans bought $20 billion of U.S. products, accounting for 15 percent of our record $137.4 billion sales total, according to US- DA.
USDA places China’s 2011- 12 total cotton imports at 15.5 million metric tons (mmt), up from just under 12 mmt for the 2010 crop year. This despite a crop that is up 3 mmt from a year earlier and poor demand because of a cooling world marketplace, pointed out Lin Tan, DTN China correspondent.
Soybean imports should total 56.5 mmt, up from 52.3 mmt last year, USDA said in December. Oil World is even more bullish, expecting the country to buy a total of 57.8 mmt—60 percent of the world’s total shipments. “It is a difficult time for Chinese processors,” Tan told DTN. “They are still crushing beans they bought at much higher prices. Cheaper beans they bought beginning in October are just arriving now, bringing down their average cost.”
U.S. farmers and traders hope for large corn purchases from China even though the country harvested its seventh record crop in eight years. USDA reports production at 191.8 mmt, a hefty increase of 14.5 mmt over a year earlier. In 2010, China imported just shy of 1 mmt; USDA pegs this year’s im ports at 3 mmt. The government currently is buying 10 mmt to 12 mmt from domestic producers to replenish its strategic reserves, which were drawn down in an effort to keep food prices in check when global prices soared.
Mexico, Japan, the European Union and South Korea follow in size of U.S. ag customers. On a percentage basis, Hong Kong is the fastest growing among the top 10 U.S. ag export markets. “Much of this growth is supported by Hong Kong’s surge in transshipments to the rapidly advancing economies of China and Vietnam, its major export partners. Hong Kong re-exports roughly 40 percent of its agricultural imports,” according to US- DA’s Foreign Agriculture Service. — Linda H. Smith, DTN