American soybeans: China is far from fulfilling its import promises

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China has asked major state-owned enterprises Cofco and Sinograin, key importers of agricultural products, to stop buying soybeans and pork from the United States. Ivan Bueno / APPA

By: Claire Fages Follow

Tensions between Beijing and Washington worsen around this time around the fate of Hong Kong. Which could give China a good excuse not to import as much American soybeans as it promised to do last January.

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China has asked major state-owned enterprises Cofco and Sinograin, key importers of agricultural products, to stop buying soybeans and pork from the United States, sources from Reuters and Bloomberg said. Friday’s order for twenty shipments of US soybeans was suspended. The deposit does not target Chinese private importers but risks making them very cautious. If the Sino-American phase 1 agreement signed in mid-January is not explicitly called into question, neither in Beijing, nor in Washington, its concrete realization is compromised.

$ 1.7 billion US soybeans and pork since January

Since then, relations have deteriorated between Beijing and Washington. First with Donald Trump's reproaches on China's management of the Covid-19 epidemic, then relations with Taiwan. This time it is the passing of the national security law , which Beijing wants to impose on Hong Kong, which crystallizes the Sino-American tensions. So many disputes that do not encourage China to order as much American agricultural products as it had promised, namely an additional $ 32 billion over two years.

Ten times more Brazilian soy

If we look at imports since January, we are far from the mark. In the first quarter, China purchased $ 691 million in US pork and $ 1 billion in soybeans from the United States. This represents between 2 and 3 million tonnes of soybeans in three months. At the same time, China ordered ten times more soybeans from Brazil! The trend continued in April and May, a jump in Brazilian exports of 30 to 40%, compared to last year, three quarters being destined for China. Soya from Brazil is unbeatable given the weakness of the real, the Brazilian currency, it is favored by Chinese crushers who continue to hedge not only on the old harvest, sold at 85%, but also on the next Brazilian harvest, already sold at 40%.

American pork too expensive today

Orders for American soybeans, which normally jump from September, are severely compromised. As for American pork, its prices have soared in the United States with the paralysis of slaughterhouses, that purchases from China have declined sharply since last month.

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