China offers tariff-free quota for US soybean purchases: report

October 23, 2019 09:25
The waivers offered by the state planner were for US shipments through March, sources said. Photo: Bloomberg

Beijing offered major Chinese and international soybean processors waivers that would exempt the companies from steep tariffs on imports of up to 10 million tons of US soybeans, Reuters reports, citing people briefed on the matter.

The quota to import US soybeans was offered on Tuesday to state-owned crushers, privately owned crushers and major international trading houses with crushing plants in China at a meeting called by the state planner on Tuesday, the sources said.

The waivers were for US shipments through March, two US export sources said.

Bids for US soybeans shipped to China were about 15 US cents a bushel below exporter offers on Tuesday afternoon, one US broker said, a wide spread indicating that sales were not imminent.

“Prices are a bit too high to move at the moment,” the broker said.

Still, exporters were scrambling for soybeans delivered to Gulf Coast shipping terminals later this year in anticipation of upcoming purchases, with bids for November and December arrivals up 4 to 6 cents a bushel, traders said.

Tuesday’s meeting of the National Development and Reform Commission comes after Trump said China had agreed to buy up to US$50 billion of US farm products annually during trade talks earlier this month.

In the week following the talks, however, China bought at least eight cargoes, or 480,000 tons worth US$173 million, of Brazilian soybeans and steered clear of the US market, traders told Reuters.

“Chinese buyers have been buying a lot of Brazilian soybeans. The government was sending a message to importers to be mindful of the big picture,” said one of the sources briefed on the matter, referring to Beijing’s desire to show goodwill in the talks.

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