China Purchases Record Amounts of US Farm Goods, Likely Due to Food Shortages: Commentator

July 16, 2020 Updated: July 16, 2020

China on July 14 booked its biggest single-day U.S. corn purchase on record.

It also bought 129,000 metric tons of soybeans.

Four days prior on July 10, China ordered its second-largest single-day U.S. corn purchase on record, in addition to a large order of U.S. wheat.

Li Kuiwen, spokesman of China’s General Administration of Customs, said that this was part of the Chinese regime’s fulfillment of the U.S.-China “Phase One” trade agreement, signed on January 15.

In the Phase One trade deal, Beijing committed to buying $200 billion worth of additional U.S. goods and services over the next two years, including $40 billion to $50 billion of agricultural goods each year.

Commentators analyzed that the Chinese regime wanted to resolve two crises via these orders. China has a food shortage due to a series of natural disasters this year. It also faces a deteriorating U.S.-China relationship triggered by Beijing’s decision to implement a national security law for Hong Kong; human rights abuses against Uyghur Muslims; and Beijing’s threats over Taiwan and the South China Sea.

Largest Single-Day Order

The U.S. Department of Agriculture (USDA) reported on July 14 that China bought 1.762 million metric tons of corn for shipment in the 2020/21 marketing year that begins on Sept 1.

The sale eclipsed the previous single-day record sale to China of 1.45 million metric tons of corn, set in December 1994, according to USDA data.

The deal follows a sale of 1.365 million metric tons of yellow grain—then the largest single-day purchase—to China last Friday.

That day, China bought 765,000 metric tons of corn for shipment in the current marketing year ending on Aug. 31 and 600,000 metric tons for shipment in the following year, according to the USDA.

It also booked 130,000 metric tons of U.S. hard red winter wheat and 190,000 metric tons of U.S. hard red spring wheat.

The USDA did not assign a value to the deals.

Epoch Times Photo
A combine is used to harvest the corn at the Hansen Family Farms in Baxter, Iowa on October 12, 2019. (Joe Raedle/Getty Images)

Why Buy?

“I think Beijing has two motivations to buy agricultural products from the U.S.,” U.S.-based China affairs commentator Tang Jingyuan told The Epoch Times on July 15.

China is likely suffering from a food shortage.

From late January to early March, almost the whole country, including farmers, were not allowed to go outside, owing to government lockdown measures to prevent the CCP virus from spreading. Then, heavy hail storms hit northern China and severe floods inundated 27 Chinese provinces. The latest disaster occurred in Yunnan and Hubei provinces, which reported locust invasions.

“It can’t be avoided that China will face a food shortage this year,” Tang said. “The Chinese regime has to book grains now.”

Compared with corn and soybeans from South America, U.S. grains are better quality and cheaper, Tang added.

The second reason, Tang noted, is that China wants to improve its relationship with the United States.

“China-U.S. relations are facing the most serious challenge since diplomatic ties were established [in 1979],” China’s foreign minister Wang Yi admitted during the China-U.S. Think Tanks Media Forum on July 9.

Wang said: “China has never intended to challenge or replace the U.S., and it has no intention of confronting the U.S. comprehensively.”

Tang said the series of new policies—such as revoking Chinese military-affiliated graduate students’ visas, sanctioning the Chinese officials who were involved in violating human rights, freezing these officials’ U.S. bank accounts—that the U.S. government released recently scared Beijing authorities.

“The Chinese regime wants to show its compromise by purchasing U.S. agricultural products,” Tang said.

Epoch Times Photo
A farmer holds soybean from the 2018 harvest at her farm in Scribber, Nebraska on May 5, 2019. (JOHANNES EISELE/AFP via Getty Images)

Zhou Li, Chinese senior economist, commented on June 22 that China is facing six enormous challenges, which include food shortage and deteriorated U.S.-China relationship.

Reuters contributes to this report.