U.S. lowers ag export and import forecasts amid Covid-19 disruptions
The U.S Department of Agriculture has revised downward its export and import forecast for the 2020 financial year due to the effects of the Covid-19 pandemic.
It also amid reports that China has told state-owned agricultural companies to suspend purchases and cancel orders as tensions flare with the U.S. over the situation in Hong Kong.
The report by the USDA's Economic Research Service (ERS) and Foreign Agricultural Service (FAS) said: "The COVID-19 outbreak has created a shock to world economies that will cause an unusually high level of uncertainty for the foreseeable future."
The organizations cut the U.S. agricultural export forecast for the 2020 financial year ending Sept. 30 to US$135.5bn, down US$3 billion from the February forecast.
This is primarily due to reductions in bulk commodities including soybeans, cotton, corn, and wheat.
The forecast for horticultural exports is unchanged at US$35.5bn. Whole and processed tree nuts are unchanged at US$9.1bn, with most shipments destined for Europe and Asia. Fresh fruit and vegetables are steady at US$7.1bn on stable shipments to top markets Canada and Mexico. Processed fruits and vegetables are unchanged at US$7.0bn on steady shipments to Canada.
Meanwhile, U.S. agricultural imports in 2020 are projected at US$130.2bn, down US$2.3 billion from the February forecast. This decline is primarily driven by expected decreases in imports of horticultural products.
The forecasts for imports of fresh fruit and vegetables are reduced by US$500m and US$200m, respectively, as these perishable products are vulnerable to spoilage when there are delays in the supply chain. It said these delays are "due to precautionary steps having been added to the production and transportation processes and reductions in the availability of labor".
The export and import figures, if realized, would mean the U.S. would have its smallest positive trade balances in years, just US$6.3bn.
By comparison, in 2014 the country exported US$152.3bn and imported US$109.3bn of agricultural products, resulting in a positive trade balance of US$43.1bn.