China likely to become 2nd largest buyer of US ag goods

16:51, September 02, 2010      

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It is estimated that China will purchase 15 billion U.S. dollars of agricultural commodities from the United States in the 2011 fiscal year. Although China only ranked fourth in 2009, it is expected that China will overtake Mexico to become the second largest agricultural importer from the United States, according to a report on the agricultural trade prospect issued by the United States Department of Agriculture (USDA) on Aug. 31.

China's agricultural imports have been on a fluctuating rise since 2000, and the annual growth rate of the agricultural import value from 2000 to 2009 has stood at about 19 percent, higher than that of the agricultural export value. The data issued by China's Ministry of Agriculture on Aug. 31 shows that in the first seven months of 2010, China's aggregate agricultural import value was up 34 percent to 39.2 billion U.S. dollars, and the agricultural trade deficit surged 62 percent to 13.1 billion U.S. dollars.

Chen Yongfu, a professor at the College of Economics and Management under China Agricultural University, said that in the wake of the report issued by the USDA, the market will have higher expectations on China's agricultural import growth and the domestic expectations on the growth of agricultural commodity prices will also be higher. With the impact of market expectations, the changes in grain prices in the international market will eventually be translated into the domestic market.

An official from the National Development and Reform Committee (NDRC) said earlier that the changes in domestic grain prices are generally immune to the international market because China's supply and demand in wheat, corn and rice are basically balanced with a small amount of imports accounting for less than 1 percent of total domestic output. Since China's output can meet the demand for key grain varieties, the changes in domestic grain prices will generally not be affected by the international market.

Zhang Ping, minister of the NDRC, said that prices for some agricultural commodities will remain at a high level in the second half. The imported inflationary pressure still exists and the hot money speculations and those from all walks of life are sensitive to the price changes, which will expand market expectations on the price rise. Some analysts recently estimated that the CPI growth rate will remain high because of expectations of a rise in the price of grain.

By People's Daily Online


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