China Buys US Soybeans

Yesterday, the USDA confirmed private sales to China of 68,000 tons of soybeans for the 2019/20 marketing year, the first such purchase by a private buyer since the trade war between the world’s two largest economies broke out more than a year ago.

Yesterday was the first new soybean purchase by China since a 544,000-ton sale was announced in late June, and the first since Beijing offered to exempt five private crushers in the country from 25-percent import tariffs on U.S. beans arriving by the end of the year.

Although just a fraction of the 87 million tons of soybeans the world’s top buyer is expected to import over the 2019/20 (Sept/Aug) season, the purchase was significant. The 25-percent tariff on U.S. soybeans made imports from rival suppliers like Brazil and Argentina far more attractive.

Chinese state-owned firms have purchased some 14 million tons of U.S. soy since an initial trade war truce was struck by U.S. President Donald Trump and China’s Xi Jinping in December, but less than 10 million tons have been shipped so far.

In 2018, China imported 31.7 million tons of US soybeans, nearly 60% of US export shipments, in deals valued at US$12.25 billion.

Source: V.O.A News & South China Morning Post