China and Russia vow to ‘deepen trade in soybeans’ after tariff war kills US crop exports

China’s Commerce Minister Zhong Shan met with Russian minister for economic development Maxim Oreshkin this week to discuss ways to increase trade

Soybeans and other agricultural goods are a key issue for China as it looks to fill the gap in the market left by produce from the United States due to the trade war

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President Xi Jinping and Russian counterpart Vladimir Putin agreed to increase bilateral trade from US$107 billion in 2018 to US$200 billion a year during the St Petersburg International Economic Forum in June. Photo: EPA

Finbarr Berminghamin BrusselsandCissy Zhouin Hong Kong

Published: 7:00pm, 18 Jul 2019Updated: 11:06pm, 10 Dec 2019

As China looks to diversify its soybean supply away from the United States, Commerce Minister Zhong Shan agreed with Russian counterparts to “deepen trade in soybeans and other agricultural products” during a meeting this week.

Zhong, a recent addition to Beijing’s negotiating team in trade war talks with Washington, met with the Russian minister for economic development Maxim Oreshkin on Tuesday to discuss ways in which the two countries could increase bilateral trade, according to a statement released by China’s Commerce Ministry on Thursday.

The meeting came after President Xi Jinping and Russian counterpart Vladimir Putin agreed to increase bilateral trade from US$107 billion in 2018 to US$200 billion a year during the St Petersburg International Economic Forum in June.

At an investment forum in Moscow last year, Putin said that Russia would increase its production and export of soybeans to China in a bid to fill the gap in the market left by the US.

China has virtually halted the import of soybeans from its biggest supplier, the US, after imposing 25 per cent tariffs on soybean imports in retaliation to American tariffs on Chinese goods.

Despite this, Russian soybean exports to China actually decreased between September and May, according to Russian customs data. Over the same period in 2017 and 2018, Russia sold 690,000 tonnes to China, compared to 580,000 tonnes this season, said UKR-Agro Consult, a Ukrainian agricultural research house.

This may be as a result of the African swine fever outbreak across China, which has dampened soybean demand, since the bulk of its imports are used in animal feed. Researchers at Rabobank have forecast that due to disease or cull, China could lose 200 million pigs this year.