China to inspect Argentine crushers, could unlock top soymeal market

BUENOS AIRES, Argentina (Reuters) — A Chinese delegation is set to visit Argentina in August to inspect soymeal crushing plants, Argentine government and industry officials told Reuters, a key step as the South American country looks to open up exports of processed soybeans to the world’s top consumer.

Argentina, the top global soymeal exporter, has tried for years to break into the China market, the biggest consumer of the meal used to feed its giant hog herd. China, with its own crushing industry to protect, has steadfastly resisted.

Global trade uncertainties, including pessimism about ongoing United States-China negotiations, has strengthened Argentina’s hand, grain traders said, prompting China to expand its soymeal import options.

“We will have a visit of Chinese officials as part of the process of pursuing the objective of exporting soybean meal to China,” said Santiago del Solar, chief of staff to Argentina’s Agriculture Secretary.

China is the No. 1 buyer of Argentine soybeans but does not import any processed meal, which could be used to help feed the world’s biggest hog herd as consumers in the country shift toward a diet of pork and poultry.

“Argentina has spent 20 years trying to gain access to the Chinese soymeal market. In all that time, this is the first Chinese trade mission to Argentina specifically to discuss soymeal,” Gustavo Idigoras, president of Argentina’s CIARA-CEC chamber of grains exporting companies, said in an interview.

He added Chinese customs inspectors would arrive on Aug. 18 for a two-week trip and visit crushing plants operated by eight firms including Bunge Ltd, Vicentin, Molinos Agro SA , Louis Dreyfus Corp. and Cargill Inc.

“It makes sense for the world’s biggest and most efficient soymeal exporter to sell to the world’s biggest consumer.”

The firms did not immediately respond or declined to comment.

Argentina’s soybean meal is exported mostly to southeast Asia, Europe and Northern Africa. China imports only small amounts of soymeal currently, none of it from Argentina.

The mission comes at a time when U.S. exporters are facing troubles getting farm goods approved by China due to the trade war raging between Washington and Beijing, which traders said may favour Argentina.

U.S. President Donald Trump on July 30 slammed what he called a “rip-off” trade deal with the Chinese, and warned the world’s No. 2 economy against waiting out his first term in office to finalize any new deal.

“I think this time, China really feels the crisis and wants to guarantee (soymeal) supplies,” said a Beijing-based grains trader on condition of anonymity. Another China trader said the impact would be less immediate, but was more a “back-up plan” for China given the trade dispute.

To be sure, China will remain overall much more focused on Argentine soybeans than meal. Chinese buyers currently buy more than 70 percent of Argentina’s total exports of raw beans.

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