China is buying more Argentine soybeans due to Beijing's trade war with the United States, and Argentina will buy more US soybeans to meet its own needs, the oilseed company Oil World said on Tuesday (25.9.2018).
Consequence of the trade conflict
U.S. soybean exports to China have virtually ground to a halt since July, when Beijing imposed steep tariffs on American imports as part of a trade war between the two nations.
China has shifted much of its soybean purchases from the United States to Brazil, but tight Brazilian supplies mean Chinese purchases are now starting to shift to Argentina..
"As Brazilian export supply declines seasonally, and falls below the year-ago level in October/December 2018, China turns to Argentina," Oil World said in its weekly report.
«In September, Argentina is expected to export approximately 100.000 tons of soybeans to China. We estimate that shipments to China could reach 1,8 million tons between September 2018 and February 2019 versus none a year ago."the Hamburg-based company said.
This means China would dominate Argentina's soybean exports from September 2018 to February 2019, which are forecast to total 1,90 million tonnes versus 1,77 million in the same period a year ago, Oil World said.
But Argentina's poor soybean harvest in early 2018 and reduced domestic supply would force Argentine processors to rely on the United States to meet their needs.
Argentina has already purchased 850.000 tons of US soybeans for shipment starting September 1.
"We expect additional soybean purchases from Argentina in the United States in the coming weeks," Oil World said.
"We project Argentina will import 1,6 million tons of U.S. soybeans in September 2018/February 2019 and possibly another 0,2 to 0,4 million tons in March 2019," he said.
Source: Reuters
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