In this file:
· Hopes for spike in U.S. farm exports to China dim ahead of trade deal signing
… large Chinese purchases of Brazilian soybeans and a pair of unexpected policy moves by Beijing have dimmed U.S. hopes that China would double its imports of American farm products this year…
· China bought 3 million mt of Brazilian soybeans in December, down 27% on year
… The low December Chinese purchases of Brazil beans were driven by the country’s demand shift to the US as the Xi administration issued tariff waivers to firms importing US-origin beans, sources said…
Hopes for spike in U.S. farm exports to China dim ahead of trade deal signing
By Karl Plume and Hallie Gu, Reuters
via WKZO (MI) - January 09, 2020
CHICAGO/BEIJING (Reuters) - Days before a U.S.-China trade deal is due to be signed, large Chinese purchases of Brazilian soybeans and a pair of unexpected policy moves by Beijing have dimmed U.S. hopes that China would double its imports of American farm products this year.
U.S. President Donald Trump has touted the prospect of China buying $40 billion in U.S. farm products in 2020 as a pillar of the "Phase 1" agreement aimed at defusing the bitter trade war that erupted between the world's two largest economies in 2018.
The conflict, marked by tit-for-tat tariffs, has disrupted the flow of billions of dollars in goods and threatened to slow global growth, rattling financial markets. It has also sent a chill through the U.S. farm community, a key political constituency for Trump as he seeks re-election in November.
China announced on Thursday that Chinese Vice Premier Liu He, who has led Beijing's delegation in the trade talks with the United States, would sign the Phase 1 deal in Washington next week.
But Chinese forward purchases of Brazilian soybeans, including about a dozen bulk vessels this week, or about 800,000 tonnes, are raising doubts Chinese buyers will have an appetite for vast supplies of U.S. soybeans once the deal is done.
Margins in China for crushing raw soybeans into livestock feed and cooking oil have improved for mid-2020, the height of Brazil's soy export season, according to two China-based traders.
China's import needs have already been covered through the first quarter of the year, the traders said on condition of anonymity.
"The key factor for crushers is whether the beans are cheap, even with a trade deal. If the beans from South America are cheap, buyers will go for South America," one of the traders said.
No details about the targeted $40 billion shopping list have been published, and China has not confirmed any purchase commitment. The U.S. grain and livestock market rally that followed the Dec. 13 announcement of a trade deal has faded.
Adding to U.S. concerns about the deal, sources in China told Reuters this week that Beijing has suspended its plan to...
STIFF COMPETITION ...
China bought 3 million mt of Brazilian soybeans in December, down 27% on year
via Hellenic Shipping News - 09/01/2020
China purchased 3 million mt of soybeans from Brazil in December, down 27% year on year, according to the Brazilian trade department.
In total, Brazil shipped out 3.44 million mt of soybeans in December, down almost 16% year on year, while the country’s calendar year soybean exports in 2019 were 11% lower on the year at 74 million mt, the trade department said.
The low December Chinese purchases of Brazil beans were driven by the country’s demand shift to the US as the Xi administration issued tariff waivers to firms importing US-origin beans, sources said.
Dismal December Brazilian soy sales could also be a cyclical issue. The last quarter in a calendar year is generally considered lean period for Brazilian soy exports because of depleting old crop inventory, while the new crop is still being planted.
The Chinese government has issued several rounds of tariff waivers on US soybean imports since August in anticipation of a partial trade deal, which the two countries could sign on January 15. Two of the world’s biggest economies have been in trade dispute since early 2018. As a result, the two nations have imposed retaliatory import tariffs on each-other’s goods worth billions of dollars.
CALENDAR YEAR SOY TRADE ...
ROAD AHEAD ...