CHICAGO/BEIJING (Reuters) - Taiwanese trade officials and business leaders signed a letter of intent on Thursday to purchase as much as 3.9 million metric tons of soybeans from farmers in Minnesota and Iowa over the next two years, Minnesota Governor Mark Dayton said in a statement.
The Taiwanese Agricultural Trade Goodwill delegation said it plans to purchase between 3.2 million and 3.9 million tonnes valued at up to $1.56 billion of Midwestern soybeans in 2018 and 2019, state officials said.
If the sales go through, it could be a big boost for U.S. soybean exports to Taiwan, the sixth-largest U.S. soybean export market last year. In 2017, Taiwan’s total soybean imports from the United States were 1.4 million metric tonnes.
The deal comes as U.S. soybean sales to top-importer China have plummeted, along with grain prices, amid a bruising trade war between the world’s top two economies. Farm groups and rural economy advocates have been pushing for the trade fight to end, as well as hunting for new markets in which to sell their agricultural goods.
The agreement came after a trade mission by Minnesota agriculture officials to Taiwan last month, and meetings with Taiwan Vegetable Oil Manufacturers Association Chairman Yau-Kuen Hung.
The push was likely fuelled by politics, as Taiwan seeks to strengthen its ties with the United States amid growing pressure from China, which claims the self-ruled island as a territory.
“They’ve been looking to cement ties with the U.S. so one way to do it would be to buy more soybeans,” said Loren Puette, Taipei-based director of ChinaAg, a consultancy.
Taiwan officials could not immediately be reached for comment.
Taiwan’s imports from the U.S. have surged this year, with U.S. soybean arrivals increasing 80 percent above the average for 2013-17 in the first seven months to 1.2 million tonnes, according to USDA data.
Taiwan is Minnesota’s sixth-largest export market, and a key trading partner for the state’s agricultural products, state officials said.
In 2013, a Taiwanese trade delegation visited Minnesota and signed a similar pledge to buy up to $3.5 billion in U.S. corn and soybeans for shipment in 2014 and 2015.
Reporting by P.J. Huffstutter in Chicago and Dominique Patton in BEIJING; Editing by Karl Plume and Matthew Lewis