HARBIN, China, (Reuters) – Top soybean buyer China can do without supplies from the United States in the fourth quarter and can rely on imports from South America instead, said an analyst with a government-backed think-tank on Friday.
The comments by Zhang Liwei, a senior analyst at the China National Grains and Oils Information Center, come after China’s Commerce Ministry said earlier this month that Chinese companies had stopped buying U.S. farm products in the latest escalation of the trade war between the world’s two largest economies.
China is the world’s top buyer of soybeans, buying around 60 percent of globally traded supplies. The United States is typically China’s second-biggest supplier, accounting for the bulk of its imports in the fourth quarter of each year.
Chinese crushers stopped purchasing soybeans from the United States last year after Beijing slapped tariffs of 25 percent on the beans in response to U.S. tariffs.
But state-owned companies had purchased about 14 million tonnes of soybeans in recent months, after a temporary trade truce late last year. Further purchases were thrown into jeopardy, however, after U.S. President Donald Trump ratcheted up tensions between the two countries with threats early in August of another wave of tariffs.
Speaking at a conference in Harbin, Zhang said that even if China and the United States fail to reach an agreement on trade in coming weeks, “we will have enough soybean supplies as we can buy from South America.”
Zhang said sales from the state reserves could also help to bolster supplies.
Outbreaks of the deadly pig disease African swine fever are helping to reduce demand for soybeans, he also said. Soybeans are crushed into meal to feed pigs and poultry.
China said on Thursday its pig herd had declined by 32 percent in July versus a year earlier. Zhang said the decline will continue into the second half of the year.