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China is proposing that it could buy an additional $30 billion a year of U.S. agricultural products including soybeans, corn and wheat as part of a possible trade deal being negotiated by the two countries, according to people with knowledge of the plan.

The offer to buy the extra farm produce would be part of the memoranda of understanding under discussion by U.S. and Chinese negotiators in Washington, according to the people, who asked not to be identified because the plans are confidential. The purchases would be on top of pre-trade war levels and continue for the period covered by the memoranda, they said.

U.S. Agriculture Secretary Sonny Perdue said it was “premature” to comment on what or how much China might buy as part of a trade deal. “I don’t want to raise expectations,” he told reporters attending the department’s annual outlook conference in Washington on Thursday. “If we reach an agreement on structural reforms we can recover markets very, very quickly.”

As part of the talks, officials are also planning to discuss removing anti-dumping and anti-subsidy tariffs on distillers dried grains, a by-product of corn ethanol production that’s used in animal feed, people said earlier.

Soybeans, corn and wheat futures prices rose in Chicago in response to the news.

Arlan Suderman, chief commodities economist for INTL FCStone, said in a note. “It would not require very large purchase of corn, ethanol and DDGS to significantly improve the corn balance sheet.”

Since a tariff truce agreed in December, China has resumed imports of some farm goods including soybeans and President Donald Trump this week said “a lot of” corn would be next on Beijing’s shopping list.

The MoUs under discussion are also said to cover areas including non-tariff barriers, services, technology transfer and intellectual property. The enforcement mechanism remains unclear, but would likely be a threat that tariffs would be reimposed if conditions aren’t met.


https://www.bloomberg.com/amp/news/articles/2019-02-21/china-said-to-propose-30-billion-more-u-s-agriculture-imports

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