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China Buys U.S. Soybeans & Explores Soymeal Exports from South America, as Trade Talks Set for October

Reuters writer Karl Plume reported last week that, “Chinese importers bought about 10 boatloads of U.S. soybeans on [Sept. 23rd] following deputy-level trade talks in Washington [Sept. 19th – 20th] that were overshadowed by the abrupt cancellation of a U.S. farm state visit by Chinese agriculture officials.

“The deals for about 600,000 tonnes, slated for shipment from Pacific Northwest export terminals from October to December, were similar in size to a wave of buying earlier this month, two traders with direct knowledge of the deals said.”

In a separate Reuters article last week, Hallie Gu reported that, “China has given new waivers to several importers to buy U.S. soybeans exempt from retaliatory tariffs, in a goodwill gesture ahead of high-level trade talks next month, two sources familiar with the matter said on Tuesday.

“The waivers, offered in two batches, total around 5 million to 6 million tonnes, according to one of the sources. They came as China returned to the U.S. soybean market this month.”

More broadly, a Bloomberg News article last week pointed out that, “Investors have been watching for signs of whether China will boost U.S. farm imports, viewing the purchases as a proxy for the outlook on trade talks.”

On Wednesday, Bloomberg News reported that,

China imported 1.68 million tons of U.S. soybeans in August, the most in four months, before top negotiators from the two countries meet in October in a further attempt to resolve their trade dispute.

“China’s August purchases compare with 912,000 tons in July and 265,378 tons in August 2018.”

“China’s Soybean Move Lands With a Thud for U.S. Farmers,” by Brendan Murray. Bloomberg News (September 24, 2019).

The Bloomberg article added that, “China bought 6.68 million tons of soybeans from Brazil, the country’s largest supplier in August, up from 6.42 million tons in July.

“Imports from Argentina in August were 655,000 tons, down from 1.07 million tons in July.”

Meanwhile, Wall Street Journal writer Lin Zhu reported last week that, “China’s Commerce Ministry on Thursday said that Chinese companies have agreed to buy ‘sizable amounts’ of soybeans and pork from the U.S. ahead of planned high-level talks in Washington next month.

“Chinese companies have been asking about prices for the U.S. farm goods, Gao Feng, the ministry’s spokesman said at a routine media briefing. He didn’t specify the quantity or the value of the purchases.”

The Journal article stated that,

In the 12 months through July, agriculture and foodstuff exports from the U.S. to China dropped by nearly $10 billion, compared with the same period a year earlier, a plunge of over 50%.

“Oil seeds including soybeans accounted for more than $7 billion of that drop, with those exports down by 65%.”

And Reuters writers Michelle Nichols and David Lawder reported late last week that, “China’s top diplomat said on Thursday that China was willing to buy more U.S. products, and said trade talks would yield results if both sides ‘take more enthusiastic measures’ to show goodwill and reduce ‘pessimistic language’ in their trade dispute.”

The Reuters article explained that, “The United States and China are preparing for another round of high-level trade talks in early October in Washington to try to find a way out of their nearly 15-month trade war.

“CNBC reported on Thursday that the talks are scheduled for Oct. 10-11 in Washington, citing people familiar with the arrangements.”

And with respect to pork, Bloomberg News reported last week that, “Chinese companies are preparing to purchase more U.S. pork, according to people familiar with the situation, as the government battles against domestic shortages and top trade negotiators from both nations plan to meet in Washington next month.”

The Bloomberg article noted that, “The imports may be part of China’s efforts to ease tensions with the U.S. as they strive to reach a trade deal. They also come at a time when the Asian nation, the world’s biggest pork consumer, desperately needs more of the meat. China has already boosted pork imports from the U.S., with July imports at the highest in two years, as the government also makes purchases for its state reserves.”

“China Prepares to Buy More U.S. Pork as Trade Talks Revive,” Bloomberg News (September 24, 2019).

Recent news articles also point to China’s growing purview of soy markets as the trade war lumbers on.

Adam Jourdan and Hallie Gu reported last week at Reuters that, “China has approved soymeal exports from seven soybean crushing plants in Argentina, the South American country’s agriculture ministry said on [Sept. 23rd].

“The announcement comes less than two weeks after Argentina, the top soymeal supplier, announced that China, the world’s biggest soymeal consumer, would allow imports from the country for the first time following decades of talks.”

Also last week, Bloomberg News reported that, “China is considering allowing imports of Brazilian soybean meal as the top pork-consuming nation looks to diversify sources of the key ingredient for pig feed, according to people familiar with the matter.”

“Opening the door to Brazilian meal would follow a similar arrangement with Argentina earlier this month. China has a large amount of soy-crushing capacity and usually prefers to import raw soybeans and process them domestically, but with the ongoing trade war with the U.S., Beijing wants to keep its options open for alternative suppliers,” the Bloomberg article said.

Keith Good Photo

Keith Good is the Farm Policy News editor for the farmdoc project. He has previously worked for the USDA’s National Agricultural Statistics Service, and compiled the daily News Summary from 2003-2015. He is a graduate of Purdue University (M.S.- Agricultural Economics), and Southern Illinois University School of Law.

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