Taiwan plans to buy $2.2 billion in Illinois corn, soybeans

26-Sep-2019 Intellasia | ChicagoBusiness | 6:02 AM Print This Post

Taiwan plans to buy $2.2 billion worth of corn and soybeans from Illinois in the next two years, which is welcome news to farmers hurting from the trade war with China.

“Lifeline? Really, that’s about what it is,” said Bobby Dowson, international marketing representative for the Illinois Department of Agriculture. “It’s hard to replace the 400-pound gorilla on the block.”

Taiwanese buyers signed letters of intent with Illinois crop marketers, according to a statement from Gov. J.B. Pritzker. There are two agreements for $1.1 billion apiece to buy corn and soy in 2020 and 2021.

The deal is more than double Taiwan’s purchases in recent years. In 2018, the country bought just under $412 million worth of Illinois corn and soybeans.

The deal comes at a time when Illinois farmers desperately need to replace soybean sales to China. In 2017, about a quarter of Illinois’ soybean crop was sold to China. (The country isn’t a major buyer of Illinois corn.) That percentage is plummeting, thanks to the trade war and African swine fever, which is killing the hogs that once grew fat on soybeans. In 2018, corn and soybean sales to China fell to $121 million, down 90 percent from a year earlier.

The US Soybean Export Council has pushed for farmers to look for alternatives to the Chinese market. Both council CEO Jim Sutter and Chief Financial Officer Ray Young at Archer Daniels Midland doubt US soy sales to China will recover to previous levels.

China considers Taiwan a breakaway province and has attempted to diplomatically isolate it since China’s civil war ended in 1949, with two more nations cutting ties last week. The United States doesn’t formally recognise Taiwan, but it supports the island nation through arms sales.

John Sullivan, director of the state Agriculture Department, said in a statement that trade partners like the Taiwan Vegetable Oil Manufacturers Association and the Taiwan Feed Industry Association “provide some certainty when we need it most.”

Taiwan says it will buy 5 million metric tonnes of corn and half a metric tonne of ethanol byproduct. In the last marketing yearthe 12-month cycle between harvests when a crop is soldit bought just under 2 million metric tonnes of corn. For soybeans, it is upping its commitment from 1.7 million metric tonnes to somewhere between 2.6 million and 2.9 million metric tonnes.

In addition to Taiwan, Mexico and the Dominican Republic are scooping up Illinois soybeans, Dowson said.

https://www.chicagobusiness.com/economy/taiwan-plans-buy-22 billion-illinois-corn-soybeans

 


Category: Taiwan

Print This Post

Comments are closed.