A worker displaying soybeans imported from Ukraine in the port of Nantong in eastern China's Jiangsu Province. – Imports of soybeans from the US, once China's largest supplier, have plummeted since a trade war between the US and China began in 2018.
STR | AFP | Getty Images
Global soybean demand has been robust lately, and sales of new American crops have been at record levels, said Jim Sutter, CEO of the U.S. Soybean Export Council.
On Tuesday, US soybean futures prices rose to their highest level since 2018 after the US Department of Agriculture announced that Chinese buyers bought 664,000 tons, the largest daily sum since July 22.
"It looks like the demand for outlook for the next six months is pretty good, and I would say US farmers are far more optimistic than they were a year or even six months ago," Sutter told CNBC's Street Signs "Asia" on Thursday.
He argued that China snapping US soybeans indicates that the first-stage trade deal between the two countries is successful.
According to the agreement signed in January, China has pledged to buy $ 12.5 billion in American agricultural products in 2020 and an additional $ 19.5 billion in 2021. China is the world's largest importer of soybeans, importing 60% of the world's soybean exports.
"I continue to believe that the Phase 1 agreement is very important and is being implemented well," said Sutter.
While there are concerns that China may not be able to meet its commitments in the first phase, he stated that this is mainly due to the assumption that the purchases would take off immediately after the deal was closed.
There were issues and details to clear up, however, and China is now actively buying soybeans at this time of year based on seasonal demand, Sutter said.
And soybean demand in the country is set to rise as the country's pig herd numbers recover from an African swine fever outbreak, he said.
"Now, at the beginning of the year, when China typically buys soybeans from the northern hemisphere – especially the US – we see them making significant purchases … we have a record amount of new plant sales currently open to China, therefore we think it's a successful trade deal, "added Sutter.