A marketing analyst says China’s ties to Russia have been further affirmed with this week’s grain supply contract signing.
Angie Setzer co-founder of the grain marketing firm Consus tells Brownfield this type of agreement is not new.
“The frame contract itself to me doesn’t mean as much when it comes to overall demand as if we were to see some sort of phytosanitary agreement,” she says. “If they get together at the end of November and come up with an agreement that would allow China to import Russian wheat, things could look a little different.”
Setzer says the move is a way for China to show other nations their support of Russia despite sanctions in place following the war on Ukraine. She says Russia will not be the only country China sources from and there is still opportunity for U.S. farmers.
“They’re not going to be a huge oilseed supplier, that’s going to be something that South America or the U.S. is going to have to do, which is part of the reason that we’ve seen soybeans rally as hard as what they have off from their lows.”
Russia has agreed to supply China with nearly $26 billion of grain, legumes, and oilseeds over the next 12 years as part of China’s Belt and Road initiative.