Key points
- China has purchased at least 35 cargoes of Argentine soybeans, exceeding previous estimates.
- This surge in purchases follows Argentina’s suspension of taxes on soybean exports.
- The move sidelines US farmers, marking the first time since 1999 that China hasn’t bought US soybeans by early October.
- The Argentine soybean purchases equate to over 2.27 million tons, a significant volume.
China’s agricultural import strategy has undergone a dramatic shift, with the country significantly increasing its purchases of soybeans from Argentina following the South American nation’s sudden suspension of export taxes. This unprecedented move has effectively sidelined US soybean farmers, who typically dominate the market during this period.
Industry sources, speaking on condition of anonymity due to the sensitivity of the information, reveal that Chinese importers have secured at least 35 shipments of Argentine soybeans, a substantial increase from the previously reported 20. The majority of these shipments are scheduled for November.
This development marks a stark contrast to previous years. China, the world’s largest soybean importer, usually relies on US supplies between October and February. However, as of September 11th – well into the new US marketing season – China had not purchased a single cargo of US soybeans. This is an unprecedented event, according to data from the US Department of Agriculture dating back to 1999.
The significant volume of Argentine soybeans purchased – over 2.27 million tons – is comparable to the peak monthly imports from Argentina in July 2015. However, it’s important to note that not all booked shipments are guaranteed to be delivered. Some shipments are also scheduled for next year, utilizing the upcoming Argentine harvest.
The American Soybean Association (ASA) has expressed deep concern, urging President Trump to take immediate action to secure a trade deal with China. In a statement released on Wednesday, the ASA highlighted the detrimental impact these events are having on the US farm economy. The association’s plea underscores the severity of the situation for American farmers.
Argentina’s temporary suspension of export taxes, announced on Monday, aims to bolster the country’s dollar reserves and alleviate pressure on the Argentinian peso. This policy, initially slated to last until October 31st or until $7 billion in crop sales were achieved, reached its target on Wednesday, further solidifying the shift in global soybean trade dynamics.
The buyers involved include both Chinese state-owned and private companies, as well as major international and domestic trading houses.
