China expected to cancel 1.1 million tonnes of soybeans from the US as new tariff bites
Shipments will be cancelled or resold as extra duty means buyers will be unable to make a profit, industry insider says
Chinese companies are expected to cancel most of the remaining soybeans they have committed to buy from the United States in the year ending August 31 once the extra tariff on US imports takes effect on Friday.
China is the world’s top soybean buyer and has yet to take delivery of more than 1.1 million tonnes booked for the current marketing year, according to figures from the US Department of Agriculture, which said last week that China had resold about 123,000 tonnes of committed deliveries to Bangladesh and Iran.
“These shipments will be either cancelled or resold if extra tariffs are imposed,” said Gao Yanbin, an investment manager with agriculture investment firm Shanghai Shenkai Investment Co. “The tariff rate is too high which will make crushers lose money.”
Some cargoes will get through because shipments destined for state reserves are free from tariffs, Gao said.
China holds unspecified volumes of state reserves of both domestic and imported soybeans. It had been forecast to buy 97 million tonnes of soybeans this marketing year.