China has booked a rare shipment of soybean meal from Argentina, as the country seeks to secure supplies of a key animal feed ingredient amid an ongoing trade war with the United States.
Several Chinese traders and feed producers jointly ordered the cargo from the world’s top exporter of soy meal and oil as a trial shipment, according to people with the knowledge of the deal. It marks the first purchase since Beijing opened the door to imports from the country in 2019, the people said.
The 30,000-ton shipment is expected to leave Argentina in July and arrive at the southern Chinese province of Guangdong in September, said the people, who asked not to be named discussing private deals. The cargo was priced at about US$360 a ton including freight, the people said.
While the volume is small, the purchase is seen as a test ahead of the fourth quarter, when US soybeans usually dominate the global market after the US harvest. China typically relies on imports of raw soybeans, which are crushed domestically into meal for livestock, as well as cooking oil.
Argentina’s top crop exporting and crushing group, which includes the major trading houses as members, met on Wednesday in Buenos Aires with Liu Huanxin, chief of China’s National Food and Strategic Reserves Administration, according to Gustavo Idigoras, who heads the group called Ciara-Cec. They discussed the commercial feasibility of Argentine soy meal exports, Idigoras said.
In an effort to avoid US crops during the trade war with Washington, Beijing has sought out a range of other suppliers. It also imported a record monthly volume of Brazilian soybeans in May.
China imposed retaliatory tariffs on a raft of US farm products, including soybeans, earlier this year. After talks earlier this month, the US said the two sides had agreed to a trade framework, a potential step toward resolving the tariffs disputes and easing tensions. Many details remain unclear, however.
The Argentine cargo was first reported by Reuters.
by Alfred Cang & Hallie Gu, Bloomberg
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