China still buying US soybeans
Import outlook optimistic: USSEC head
China has not halted purchases of US soybeans as some media reports speculated, and new purchases are ongoing, a senior executive of the US Soybean Export Council (USSEC) told the Global Times in an exclusive interview.
“We have no confirmation that the Chinese government asked Chinese importers to halt purchases and, in fact, new purchases have been announced this week,” Jim Sutter, CEO of the USSEC, told the Global Times in a written reply on Thursday.
China has asked its state-owned firms to halt purchases of soybeans and pork from the US amid escalating tensions, Reuters reported on Monday, citing relevant sources. “China is still buying US soybeans,” China’s Ministry of Agriculture and Rural Affairs said in a statement on Wednesday, noting that Chinese state-owned firms had purchased at least 180,000 tons of soybeans from the US on Monday alone.
The US is typically the top exporter of soybeans to China during the autumn season. “As we look ahead to our harvest and shipping window this fall, we are optimistic that China will honor the phase one trade agreement to substantially increase imports of US farm products, including soybeans,” Sutter said.
Sutter holds an optimistic attitude that China will return as a significant buyer of US soybeans in 2020 with total volume nearing levels seen in previous years, which would be a significant increase to recent years.
“We have high hopes for the phase one trade agreement and regaining open access to the largest market in the world for soybeans. From what we’ve heard, US and Chinese negotiators will keep working to prevent anything from interrupting this historic agreement from being fulfilled for the benefit of US soybean farmers and US agriculture,” he noted.
US soybeans to China, which takes a significant stake for the country’s agricultural product exports, had faltered last year due to the China-US trade war.
US soybean exports to China amounted to 12.7 million tons for the 2019-20 marketing year which started September 1. At this time last year, accumulated US soybean exports to China were at 6.6 million tons – down considerably from pretrade war levels of around 30 million tons, data from the USSEC showed.
Despite the new soybean purchase unaffected at the moment amid escalating tensions between China and the US, it does not mean the soybean card held by China would not be played in case the Trump administration imposes harsh sanctions on China’s Hong Kong Special Administrative Region over the national security legislation, experts said.
China has been gradually reducing its reliance on US soybean imports since 2012, said Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news.
“China had been stepping up efforts to diversify its soybean import suppliers in the past few years, and the country can significantly reduce its soybean imports, which is a major source of fodder, by putting more low-protein feed in the troughs,” Jiao said.