China’s top agriculture consultancy said last week that it believes China can and will make good on a promise to purchase more than $40 billion in U.S. agricultural products per year. That pledge is part of a Phase One trade deal the two countries recently signed.
Reuters says China will increase its agricultural purchases to anywhere between $40 and $50 billion over the next two years. The deal isn’t signed yet and that’s led to skepticism over whether China can handle purchases that large.
Shanghai-based consultant group JCI released a document saying that most foreign media don’t believe China can fulfill that level of commitment. “As a Chinese consultant company on the agricultural market, JCI strongly believes that China has the ability and will fulfill its promise,” the company says. JCI estimates that China can buy approximately $41.3 billion worth of U.S. farm products every year, including around $18.7 billion worth of soybeans, which would amount to 45 million tons.
The projections from JCI were based on what they say was a “careful study” of China’s import volume of U.S. farm products in the past and does assume favorable weather and pricing throughout the term of the agreement.