China says exporters front-loading shipments due to changes in trade environment

Comments made by Chinese commerce ministry spokesman Gao Feng

PUBLISHED : Thursday, 14 June, 2018, 12:27pm
UPDATED : Thursday, 14 June, 2018, 12:27pm

Chinese exporters are front-loading their shipments due to changes in the international trade environment, China’s commerce ministry spokesman Gao Feng said on Thursday amid rising trade tensions with the United States.

Gao, who made the comment during a weekly briefing, did not specifically mention Beijing’s escalating trade row with Washington.

US President Donald Trump will meet his top trade advisers on Thursday to decide whether to activate threatened tariffs on billions of dollars in Chinese goods, according to a senior official.

China would also push for a change in its exports from pursuing size and speed to quality and efficiency, Gao said

Meanwhile, US soybean futures fell to 9½-month lows on Wednesday, after a media report renewed fears that China could hit US soybeans with retaliatory tariffs if Washington follows through on threats to impose duties on Chinese goods, traders and analysts said.

Trump “is expected to impose tariffs on Chinese goods as soon as Friday or next week”, according to a story published late on Tuesday by news outlet Politico.

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The report rattled grains markets on Wednesday, as grain futures have been hit by fears of a trade war between the world’s top two economies and by worsening trade ties between the US and traditional allies Mexico, Canada and the European Union.

Benchmark Chicago Board of Trade July soybean futures closed down 1.9 per cent on Wednesday at US$9.36 a bushel after touching a low of US$9.34, the lowest for a most active contract month since August 31. Corn and wheat markets also fell.

“There’s this fear that things have turned sour,” said Roy Huckabay, an analyst with Linn & Associates, a Chicago-based brokerage.

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China is expected to import 97 million tonnes of soybeans from all origins in the marketing year ending August 31. It imported more than 36 million tonnes of US soybeans in the 2016-17 season, according to US Department of Agriculture (USDA) data.

China has not been an active buyer of US soybeans in recent weeks and the world’s top importer has yet to take delivery on at least 3 million tonnes of US soybeans that buyers there have bought, according to the USDA.

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Those unshipped sales may be cancelled if tariffs are imposed, traders said Wednesday.

The US may also see China shift more of its buying to South America, where major producers Brazil and Argentina have expanded production and improved shipping infrastructure in recent years, they said.

“Normally this is the time of year that the Chinese importer comes forward. This kind of price break would be seen as very appetising for them to make purchases, but we’re not seeing any of that,” said Dan Basse, president of AgResource Co.

“If they put tariffs on beans it will encourage South American growers to produce more and will hurt the United States in terms of export sales down the road,” he said.