China announces new tariff waiver on US soybeans

Several Chinese companies can now buy US soybean ahead of higher-level trade talks between China and the US.

China US soybeans
Earlier in September, China said it was considering lifting tariffs on US soybeans, pork and other agricultural products ahead of further trade negotiations in October [Daniel Acker/Reuters]

The Chinese government has given new waivers to several domestic state and private companies to buy U.S. soybeans without being subject to retaliatory tariffs, according to people familiar with the situation.

The companies received waivers for between 2 million to 3 million tons, said the people, who asked not to be identified as the information is private. Some firms already bought at least 20 cargoes, or about 1.2 million tons, from the U.S. Pacific Northwest on Monday, the people said.

Among the companies are state-owned buyers Cofco and Sinograin as well as five other crushers, the people said. China’s commerce ministry didn’t respond to a fax seeking comment.

The waivers follow a meeting between working level officials last week in the U.S. and before top negotiators meet next month to try to resolve the trade dispute. China’s commitment to buy more U.S. agricultural products is central to the talks, with President Donald Trump looking to shore up support from American farmers, an important political constituency in next year’s elections.

Soybean futures traded in Chicago gained as much as 0.2% on Tuesday, erasing an earlier 0.2% decline. Soybean meal prices also reversed losses, adding 0.2%.

Looking for Signs

Investors have been watching for signs of whether China will boost U.S. farm imports, viewing the purchases as a proxy for the outlook on trade talks. Global financial markets were roiled in the past two days after a Chinese delegation’s visit to American farms was called off at the request of the U.S.

The change in schedule has nothing to do with trade talks, China’s Vice Agriculture Minister Han Jun was quoted as saying in a China Business News report. China is willing to expand farm trade, and the two nations had sufficient and candid communication about agriculture in just-finished ministerial level negotiations, the report said. Chinese Vice Premier Liu He plans to visit Washington next month for trade talks.

Source: Bloomberg