Taiwanese trade officials and business leaders signed a letter of intent on Thursday to purchase as much as 3.9 million metric tons of soyabeans 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 soyabeans in 2018 and 2019, state officials said. If the sales go through, it could be a big boost for US soyabean exports to Taiwan, the sixth-largest US soyabean export market last year. In 2017, Taiwan's total soyabean imports from the United States were 1.4 million metric tonnes.
The deal comes as US soyabean 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 US so one way to do it would be to buy more soyabeans," said Loren Puette, Taipei-based director of ChinaAg, a consultancy. Taiwan officials could not immediately be reached for comment. Taiwan's imports from the US have surged this year, with US soyabean arrivals increasing 80 percent above the average for 2013-17 in the first seven months to 1.2 million tonnes, according to USDA data.