China is considering allowing imports of Brazilian soybean meal as the top pork-consuming nation looks to diversify sources of the key ingredient for pig feed, according to people familiar with the matter.
Chinese officials recently visited crushing plants in Brazil as part of a trip organized by soy processor group Abiove, said the people, who asked not to be identified because talks are private and in early stages. Nobody replied to a fax sent to Chinese customs seeking comment. Abiove declined to comment.
Opening the door to Brazilian meal would follow a similar arrangement with Argentina earlier this month. China has a large amount of soy-crushing capacity and usually prefers to import raw soybeans and process them domestically, but with the ongoing trade war with the U.S., Beijing wants to keep its options open for alternative suppliers.
The move may also help bilateral relations ahead of President Xi Jinping’s visit to Brazil in November for the BRICS Summit and comes at a time when China is expanding its footprint in Latin America. It could also help China’s cause in U.S. trade talks by showing it can source the oilseed and related products elsewhere.
Still, China has been showing signs that it’s willing to work toward easing tensions with the U.S. Beijing has given new waivers to several domestic state and private companies to buy American beans without being subject to retaliatory tariffs, people familiar with the situation said. The world’s top pork consumer is also preparing to buy more of the meat from the U.S., people said.
Soymeal prices traded in Dalian, China, gained 1.1% on Wednesday after falling 0.6% a day earlier. Meanwhile, futures for the commodity in Chicago gained 0.3%, extending Tuesday’s advance.
Crushers in Argentina are expected to ship meal to chicken farms, easing concerns about falling demand from the nation’s huge pig herd, which is shrinking because of African swine fever, according to Argentina’s crop export and crushing chamber Ciara-Cec.
Still, reduced feed demand from the pork industry as well as pressure to promote the domestic crushing industry are likely to limit China’s meal imports from South America.