High premiums on Brazilian cargoes are discouraging soybean buyers in China, which means the country has yet to secure much of its needed soybean supply for December and January. The development could prompt the Chinese government to tap state reserves to meet the near-term needs, according to Reuters.
China covered its needs through November with hefty buys from Argentina in recent weeks, but still needs eight to nine million metric tons for December and January. Escalating Washington-Beijing trade tensions continue to shut American soybeans from the market.
“China isn’t buying U.S. beans because of the trade war, and Brazilian beans have become too expensive,” one oilseed trader at an international trading company that supplies agricultural products to China told Reuters anonymously. “China might end up using its own reserves for its year-end needs and into early next year, and will wait until the new South American harvest comes in.”
Sources: Reuters, NAFB News Service
