BUENOS AIRES, April 24 (Reuters) – Argentine officials are in China this week, promoting the country’s soymeal products to win over local buyers and gain long sought approval from Beijing to sell soy-based livestock feed to the world’s top consumer.
China is the No. 1 buyer of Argentine soybeans but does not import any of its higher-margin processed meal, which could be used to help feed the world’s biggest hog heard as consumers in the country shift toward a diet of meal-fed pork and poultry.
Argentina, the world’s top soymeal exporter, has struggled to get permission to supply livestock feed directly to China, which currently crushes imported beans into meal locally.
“We are talking with them about the quality of our soymeal, trying to reach the point where they approve Argentina as a supplier of meal to China,” Santiago del Solar, chief of staff to Argentine Agriculture Secretary Luis Etchevehere, said in a telephone interview on Wednesday.
“But it’s step by step. It takes time.”
The meetings come as China has slashed soy imports from the United States, the world’s No. 2 producer, amid a trade war that has redrawn global grain flows. Benchmark soybean prices on the Chicago Board of Trade are hovering just above decade lows struck last year as the trade war deepened.
The Argentine delegation in China this week includes Etchevehere and the president of the CIARA-CEC chamber of grains exporters and soy crushing firms, Gustavo Idigoras, who said the aim of the trip was to lock in long-term trade deals.
“This event is a milestone for commercial relations with China. It had never been possible before to provide information about our capabilities directly to Chinese buyers,” Idigoras said in a statement emailed to Reuters.
The delegation met with representatives of 70 Chinese agro-industrial companies, the statement said.
At 70 million tonnes per year, Chinese consumption of soymeal is the biggest in the world. The country imports only small amounts of soymeal, none of it from Argentina.
Logistical advantages have made Argentina the most efficient manufacturer of soymeal. Soybeans are trucked from the Pampas farm belt to huge crushing plants next to the Parana River, where the meal is loaded onto ocean-going ships.
Pampas farmers are expected to bring in 55.9 million tonnes of soy this season, according to government projections. That would be a 48 percent jump over the previous crop year, when Argentine soy production got walloped by drought. Harvesting started in March and is expected to end next month.