Reuters is reporting that China is likely to ship more US soy after Beijing signalled to grains purchasers on Wednesday that they should buy more to help ease tensions between the two top economies, according to trade sources.
China pledged at the weekend to increase imports from its top trading partner to avert a trade war that could damage the global economy. Energy and commodities were high on Washington’s list of products for sale.
But US President Donald Trump indicated on Wednesday that negotiations were still short of his objectives when he said any deal would need a “different structure”.
China is the world’s top importer of soy, and already buys significant volumes of it from the US. It is unclear how much more Chinese importers will buy from the US than they would have otherwise, but any additional shipments would contribute to cutting the trade surplus, as demanded by Trump.
China’s state grain stockpiler Sinograin returned this week to the US soybean market for the first time since early April, two sources said.
Soybeans are America’s top agricultural export to China, worth US$12 billion last year, and the absence of Chinese buyers from the market had left US farmers uncertain if their biggest buyers was going to want their next harvest.
Sinograin enquired about prices for US soybeans this week, traders said, which market participants interpreted as a sign that government curbs on buying American goods had been lifted.
“Sinograin is in the market today asking US suppliers to make offers for shipment of old-crop as well as new-crop beans for shipment August onwards,” said a source who works at a private soybean crushing company in China. “It is a clear message to even private companies that it is OK now to import US beans.”
Two other sources briefed on the matter said Chinese state grain trader Cofco would be permitted to buy US soybeans again, ending restrictions imposed by Beijing as trade tensions rose. The sources declined to be named as they are not authorised to speak to the media.
Sinograin, Cofco and the Ministry of Agriculture and Rural Affairs did not respond to requests for comment.
The Ministry of Commerce had not told state companies to increase purchases of US soybeans, a ministry spokeswoman said.
US Gulf export prices for the new soybean crop rose on Tuesday, which a US-based trader said may indicate a revival in demand from China. Exporters were lining up supplies for October to December shipment, the trader said.
Improving trade relations appeared to be rekindling interest from China for other grains, traders said. That will come as a big relief to US farmers, who saw orders cancelled and business dry up as Washington and Beijing threatened each other with trade tariffs.
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