Tuesday, Chinese importers bought at least 2 cargoes of US soybean after receiving another round of tariff-free quota for US shipments.
The sales, the 1st since Washington announced an interim trade deal with Beijing last week, may also be China’s last large US purchases before newly harvested soybean from Top supplier Brazil begin hitting the market next month, traders said.
A US trader confirmed that 2 cargoes, or about 120,000 tonnes, were sold Tuesday. A 2nd U.S. trader said 4 cargoes were sold, and a trader in China said at least 6 vessels, or more than 400,000 tonnes, were booked.
Chinese demand for soybean, which are processed into animal feed and cooking oil, has eroded as 50% of China’s hog herd has been wiped out by African swine fever.
Market analysts and traders have questioned how Chinese purchases of US agricultural goods and related products, which peaked around $29-B in Y 2013, would hit the US target of $40 to 50 Billion starting in Y 2020.
Duty-free quota was awarded for 10 to 15 vessels, or between 600,000 and 1,050,000 tonnes, said the 2 US traders.
Importers that had received waivers last month but had not used them saw those waivers canceled without warning, they said.
China will issue more of such quotas and more frequently, now that an initial deal was reached, said two other trade sources familiar with Beijing’s plan.
Chinese crushers would need about 1-M tonnes of US soybean before new-crop Brazilian beans are available, traders estimated.
“I do not think there will be much more buying after this, as the market here does not need many US soybeans now,” said 1 trader with a Chinese importer that has booked Brazilian beans beyond mid-2020.