China has stopped buying US soyabeans and cancelled more than 60,000 tonnes worth of existing orders as trade tensions keep rising between the two economic giants, according to world’s largest oilseed processor Bunge.
Bunge CEO Soren Schroder told Bloomberg news agency on 2 May that Chinese purchases of US soyabeans had ground to a halt after China announced retaliatory tariffs against US agri products in April.
“Whatever they’re buying is non-US. They’re buying beans in Canada, in Brazil, mostly Brazil. But very deliberately, they’re not buying anything from the US,” Schroder said.
According to data from the US Department of Agriculture, in the two weeks ended 19 April, China had cancelled 62,690 tonnes worth of soyabean purchases from the USA.
Price volatility in farm goods had increased since March, which was causing concern amongst US soya farmers, whose prices were heavily dependent on trade with China, the world’s largest soyabean importer, Bloomberg said.
This was good news for Brazil, which was projected to sell a record 66.3M tonnes of soya abroad in the 2017/18 season, against 51M tonnes from the USA.
The Chinese tariffs on US agricultural imports – such as soyabeans, corn and pork – were announced to counter the tariffs that the Trump administration was planning to impose on Chinese metal and electronic products, such as solar panels and aluminium.
While the US agri market had hoped that the threats would not have turned into action and trade between the countries could continue, Schroder told Bloomberg that, so far, their hopes had been dashed and it was “very clear” that China had stopped buying from the USA.
“How long that will last, who knows? But so long as there is this big cloud of uncertainty, that’s likely to continue,” said Schroder.
According to him, Bunge was nonetheless in “a very good position” to meet Chinese demand through soyabean shipments sourced from its suppliers outside the USA.
“I would rather say that we would prefer that free trade and no disruptions take place because it’s not good for anyone,” Schroder added.