The hemp tides have turned, at least for exports. Over the next two years, China has agreed to import hemp from the U.S. as part of an international trade agreement. In the past, the country was one of the main channels of hemp imports for the U.S.
According to Hemp Industry Daily, in 2018 the U.S. imported approximately $3.3 million in hemp from China. This pleasant turn of events is now presenting a new market to American hemp farmers. The agreement includes stipulations on more than 200 agricultural commodities. Hemp is one of those commodities.
The deal refers to “true hemp.” It is defined within the document as “True hemp (cannabis Sativa l.), raw or processed but not spun; tow and waste of true hemp (including yarn waste and garnetted stock).” China has cultivated hemp for thousands of years but has only recently started expanding the industry with imports. Global legalization has resulted in the soaring popularity of hemp.
The agreement didn’t quantify the exact amount of hemp China will be importing. Still, the accord stipulates that the country will spend at least $12.5 billion more than it did in 2017 for the various agricultural commodities in 2020 and at least $19.5 billion more than 2017 in 2021.
Hemp was federally legalized in the U.S. under the 2018 Farm Bill. Since that time, the hemp industry has boomed, thanks to government support and regulators. Both groups have ensured that the industry has the resources it needs to grow and expand. Consumers have been clamoring for CBD products, and farmers have struggled to keep up with demand. In the meantime, the U.S. Department of Agriculture (USDA) is finalizing hemp regulations after releasing an interim final rule in 2019.
“The Parties acknowledge that trade and economic structural changes resulting from this Agreement and from other actions being taken by China to open up its economy and improve its trade regime should lead to improved trade flows, including significant increases in exports of goods and services to China by the United States and other countries,” the accord says.
“The Parties believe that expanding trade is conducive to the improvement of their bilateral trade relationship, the optimal allocation of resources, economic restructuring, and sustainable economic development, given the high degree of complementarity in trade between them. The Parties recognize that the United States produces and can supply high-quality, competitively priced goods and services, while China needs to increase the importation of quality and affordable goods and services to satisfy the increasing demand from Chinese consumers.”