China buys reported US$300 million of American soybeans in second round of post-trade war truce deals
- The purchase, believed to be around 900,000 tonnes, is further evidence mainland is following terms agreed by President Xi Jinping and counterpart Donald Trump
Chinese importers returned to the United States soybean market for their second round of purchases since the two countries agreed to a truce in their trade war, four traders with knowledge of the deals and the US Soybean Export Council said.
The purchases on Tuesday are the latest evidence that China is making good on pledges to buy US agricultural goods as part of the 90-day trade war truce agreed to by US President Donald Trump and Chinese counterpart Xi Jinping on December 1.
The renewed buying lifted benchmark soybean futures prices at the Chicago Board of Trade on Tuesday, although gains were tempered by the slower-than-anticipated pace of purchases by the world’s top soybean importer.
One trader said Chinese state-owned companies bought 15 cargoes, or about 900,000 tonnes, on Tuesday for shipment from January to March, deals that would be worth more than US$300 million.
A spokeswoman for the US Soybean Export Council confirmed the renewed buying, citing trade sources in China, but did not know the amount.
Soybean prices at US Pacific northwest and Gulf coast export terminals rose by 1.5 per cent as the new wave of buying sent exporters scrambling for supplies shipped by rail or barge from the Midwest farm belt.
Soybean futures on the Chicago Board of Trade gained about 0.3 per cent.
The volume of sales since the meeting on December 1 has been disappointing to traders who were expecting far larger purchases, which are needed to absorb a massive soybean stockpile bolstered by a record-large US harvest.
Trump said last week that China was buying a “tremendous amount” of soybeans.
The 25 per cent tariff Beijing imposed on US soybeans in retaliation for duties Trump placed on Chinese goods remains in effect, limiting interest from private soy importers in China.
China last year imported 31.7 million tonnes of US soybeans, nearly 60 per cent of US export shipments, in deals valued at US$12.25 billion.
Trump on Monday said he authorised a second round of payments from an aid package of up to US$12 billion designed to help farmers suffering from the 90 per cent plunge in Chinese demand for US soy.
The purchases in recent days will not do much to benefit farmers, but they do provide a goodwill gesture before the next round of US-China talks.
The United States has a long list of complaints against China regarding intellectual property, forced technology transfers and industrial subsidies.