The First Stage Agreement Between China And The US Includes 200 Billion US Dollars For Cotton Purchase.

At present, although the details of the first stage trade agreement between China and the United States will not be disclosed before the document is signed, both sides have publicly stated that there is no more details to be negotiated. What is now waiting is that the legal teams of the two countries will properly review the conflict between the agreement and other legal commitments, such as WTO obligations, and complete the translation work.

Last Sunday, American trade representative lettlet was rare in the evening news program "facing the whole country". He outlines the framework of the agreement roughly and deserves some attention.

Wright F Ze said that China and the United States have reached agreement on the first stage agreement and will sign it once the translation is completed and approved by the lawyers. The first phase of the agreement is 86 pages thick, which covers much more than the most widely reported agricultural products. The United States will implement every part of the agreement and implement it, and it will be implemented outside the WTO. Wright F Ze said that each type of agricultural product procurement has a clear target amount, which means that cotton is one of the procurement objectives. The agreement includes a total purchase of 200 billion dollars, and agricultural products are only part of it.

According to the analysis of American industry organizations, the lowest export of US agricultural products in the past ten years was US $13 billion 108 million in 2018, the highest being US $29 billion 350 million in 2013. Oil crops and cereals accounted for the largest, followed by meat and gardening. The minimum export volume of cotton was $553 million in 2016, the highest of which was $3 billion 454 million in 2012. From the point of view of US agricultural exports, it is not unusual to export US $40 billion a year. In 2017, China's imports of agricultural products amounted to US $131 billion, so importing US $40 billion US agricultural products should be feasible and possible.

Looking ahead, the market seems quite sure that the first stage agreement will be signed without question in the first few weeks of the new year. Although the target of specific commodities purchased by China will remain state secrets, the market knows that no matter what the goods are, China will certainly need to buy a lot to get close to the agreed figures. In addition to the specific date and date of signing, traders will continue to pay attention to the export sales situation of the United States, so as to understand the signs of China's procurement. Many futures traders hope that the signing agreement will allow the market to start paying attention to data on supply and demand of cotton and reduce concerns about news headlines, at least two years after the agreement is reached.