China now top U.S. ag export market: Vilsack

By Charles Abbott and Christopher Doering

WASHINGTON (BestGrowthStock) – China bought more than $10 billion in U.S. farm goods in the first six months of the year to become the country’s No 1 agricultural export market, USDA Secretary Tom Vilsack said on Thursday.

In an interview with Reuters, Vilsack said farm exports during the first half of fiscal 2010 totaled $59 billion, “the best six months ag trade has had.” With the strong start, the U.S. Department of Agriculture will probably raise its forecast of sales for the year, he said.

The forecast now is $100 billion for total U.S. agriculture exports for the fiscal year ending September 30, up from the recession-hit $98 billion tallied in 2009 and second to the record $115 billion of 2008. USDA will update its export forecast on May 27.

“One of the factors is that China is our top market in the first six months, well over $10 billion,” said Vilsack. A USDA official said the exact figure was $10.6 billion.

China is the world’s largest importer of cotton and soybeans. It roiled the grain market with a purchase of 369,000 tonnes of U.S. corn on May 13, its largest purchase since 2001, and creating hopes of steady, large sales to Beijing.

The world’s most populous nation and a dynamic economy, China has shot to prominence as a U.S. farm export market over the past few years. At the start of the decade it ranked seventh, just behind Taiwan and buying less than $2 billion a year. By 2004 it was No 5 with purchases of $6 billion, and it would nearly double that figure this year.

An official of state-owned COFCO Co Ltd said on Thursday it bought an additional two cargoes of U.S. corn, boosting Chinese purchases since April to about 600,000 tonnes.

Vilsack declined to comment on the likely size of U.S. corn sales to China.

The purchases by China, the world’s second-largest corn consumer after the United States, come at a time when Beijing has been selling reserves to tamp down rising prices.

Traders and analysts said the surge in agriculture exports was primarily to meet demand from feedmakers in China. Others suspect the Chinese government may be looking to boost its stockpiles.

“Without a doubt it’s definitely been greater than was expected,” said Gary Blumenthal, a trade analyst with World Perspectives, of the U.S. farm exports to China.

He said the recent buying activity implies “a longer term need and flow of goods” to Bejing.

In February, USDA said China would be the No 3 U.S. farm export customer this year, displacing Japan and trailing Canada and Mexico. Undersecretary Jim Miller said China could become the overall top customer “in just a few years.”

At present, USDA estimates sales of $11.7 billion to China during fiscal 2010. USDA said in its May 11 world production report that China cotton imports are forecast to rise to 11.5 million (480-pound bales) from 10 million a year ago.

Meanwhile, China soybean imports are projected to rise 3 million tonnes to 49 million, accounting for more than half of world soybean trade, according to USDA.

U.S. farm exports are rising due to economic recovery around the world, said Vilsack. “Our hope is that it will continue.”

Exports of cotton and oilseeds such as soybeans have been “very strong,” he said, and livestock sales are “up a bit. The only downside is grains.”

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(Reporting by Charles Abbott and Christopher Doering; editing by Jim Marshall)

China now top U.S. ag export market: Vilsack