Despite the carrot of a potential exemption from import tariffs, Chinese soybean crushers are unlikely to buy in bulk from the United States any time soon as they grapple with poor margins and longer-term doubts about Sino-U.S. trade relations, people familiar with the matter said.....MORE
China imposed a 25% tariff on U.S. soy imports last year as Washington-Beijing trade disagreements boiled over into tit-for-tat levies on each other’s goods. That blow was felt on both sides of the Pacific: China was the top buyer of U.S. soybeans.
A warming of relations led to hopes in the soy trade that the situation might improve: After talks last month, U.S. President Donald Trump said he had agreed not to impose new tariffs on Chinese goods - if China purchased more U.S. agricultural products.
There have been no signs of U.S. soybean sales to China in recent weeks, but in an apparent goodwill gesture Chinese officials briefed private importers last Friday on a plan to boost them, according to three people familiar with the matter. These and other people interviewed by Reuters on the subject declined to be named due to the sensitivity of the issue.
According to one of the sources, a group of five crushers were told by China’s state planner that they could apply for exemptions from the 25% tariffs on some U.S. soybean cargoes arriving before the end of December.
The source said the group included Yihai Kerry, owned by Singapore-based Wilmar International, state-owned Jiusan Group, and privately owned Shandong Bohi Industry Co, Hopefull Grain & Oil, and China Sea Grains & Oils Industry.
But even without the extra tariffs, U.S. soybeans could not compete with Brazilian supplies on price until at least October, based on current premiums and margins, according to six traders and analysts surveyed by Reuters, making immediate orders unlikely....
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