Between Russia and the United States, a serious struggle may develop for the export of agricultural products to China.
The trade war between China and the United States began in 2018 after the publication in the United States of the foreign trade turnover of the two countries in 2017.
It was then that the United States accused China of unfair competition and the undervaluation of the renminbi.
On May 22, 2018, US President Donald Trump signed a memorandum on combating China’s economic aggression.
And for two years now, the world has been watching the situation with tension: either agreements are signed, or new restrictions are introduced.
In January, an agreement was signed under which China was obliged to increase purchases from the United States. For its part, the United States had to abandon the introduction of the last round of duties, as well as conduct a two-fold reduction in the tariff on Chinese imports by $ 112 billion.
The agreement provided for an increase in imports of agricultural products by $ 32 billion.
At the same time, in the first quarter of 2020, China bought soybeans for only $ 1 billion, pork for $ 691 million.
And already at the end of May, Chinese state-owned companies were recommended to stop the purchase of pork and soybeans from the United States in connection with a statement by the US president about the possible deprivation of Hong Kong’s privileged status and economic benefits.
This rejection of procurement may ultimately lead to the breakdown of the January agreement between the two countries.
At the same time, China is still the largest importer of the United States: import turnover amounts to billions of dollars annually.
In turn, the United States remains the largest agricultural producer in the world.
But, in connection with the ongoing trade war and the low quality of raw materials from Australia and Canada, China began to actively search for alternative suppliers.
And in this regard, he pays special attention to Russia with its developing production.
This is where a serious confrontation between Russia and the United States over Chinese markets is possible.
Russia has long and fruitfully cooperated with Beijing in the export of agricultural supplies, but it cannot increase its supplies to the Chinese market at one point, unlike the United States.
According to the long-term plan of China, the supply of American soybeans, for example, will increase in the next few years, until Russia increases its soybean production to the desired level.
Already, the Ministry of Agriculture of Russia plans to use 500 thousand hectares of agricultural land in the Far East for growing legumes.
Analysts believe that, as a result of such a trick, a situation may arise where the US share in the Chinese market will inevitably begin to decline, and American farmers will begin to suffer enormous losses.
China is now the largest importer of Russian products, and volumes continue to grow.
The main export volumes to the Celestial Empire consist of the following categories :
1. Raw materials (including partially processed).
74.5% is mineral fuel (including oil and distillation products), wood and its products, as well as ore, slag and ash.
2. Hardware
Nuclear reactors, boilers, equipment and mechanical devices
3. Food Exports
And although the share of food products in total exports to China is still small, there has recently been a clear increase in the supply of honey, grain, flour, soy and sunflower oil.
According to the analytical platform Logistic OS , in 2019, 41 753 thousand were exported to China alone tons.
China’s food market is huge, and manufacturers from all over the world are striving for it.
The structure of modern international trade is not limited to the sale of scarce goods in one country due to their movement from another.
Today, the export of goods has become mandatory in the structure of any company that seeks to increase sales volumes.
Therefore, competition will be high, and those manufacturers who use new approaches in trade will win.
In particular, we are talking about creating long-term projects, a prerequisite for participation in which is co-investment by the exporting country.
And such projects are already in Russia.
P.S. : According to the latest information, Chinese importers purchased a record batch of corn from the USA: 765 thousand tons for delivery before August 1 and 600 thousand tons for delivery after September 2020.
