China could surpass Canada as the largest buyer of Virginia agricultural products after a soybean export deal announced Thursday.
Perdue Agribusiness Inc. which owns a deep-water export terminal for grains and oilseeds in Chesapeake, signed an agreement to export soybeans to Hong Kong-based Dandong Port Group Co. and an affiliate company that is the largest buyer of soybeans in China.
"This is a really, really important deal for Virginia soybean producers and Perdue Agribusiness," said Todd Haymore, Virginia's secretary of agriculture and forestry. "We would like to believe that this is the first of many shipments to the Port of Dandong that would benefit all parties involved, especially Virginia soybean producers."
The deal includes contracts to export more than 100,000 metric tons of soybeans to China, Gov. Bob McDonnell's office said.
While Perdue will buy soybeans from growers in several states, the deal could have a major impact for Virginia producers, said Dick Atkinson, executive director of the Virginia Soybean Association. The amount of soybeans in the deal equals about 15 percent of this year's expected soybean production in Virginia.
"The more markets that are available, the better the price is for producers," Atkinson said.
In 2010, China was the second largest export market for Virginia's agricultural products, with shipments valued at almost $195 million. The new deal could push China into the top spot ahead of Canada, which imported about $249 million in agricultural products from Virginia in 2010.
Dandong Port Group Co. operates ports throughout Asia, including the Port of Dandong in China's Liaoning Province
Salisbury, Md.-based Perdue said the company has sold to China in the past, "but we expect that this relationship will present us with a regular demand for our soybeans."
The deal is the third announced since McDonnell went on an 11-day mission to China, Japan and South Korea in May.
In June, Virginia-based Smithfield Foods Inc. and the Dandong Port Group agreed to work together on opportunities in northern China. In August, Barboursville Vineyards reached an agreement to export its wines to China.
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