Chinese buyers return to Brazilian soybeans following a further escalation of the US-China trade war.
According to the Bloomberg portal, the Chinese are bidding for Brazilian soy shipments in August, September and October.
Anonymous sources say China intends to buy the Brazilian product following US President Donald Trump’s announcement about additional tariffs.
Despite the resumption, Chinese companies are not currently planning to suspend or cancel US soybean shipments.
With Chinese interest in soybeans, Brazilian soybeans had a rise in prices, such as the port of Paranaguá, which had its October premium raised to 11%.
In turn, Ana Luiza Lodi, an analyst at INTL FCStone, said that Brazilian supplies available for shipment are limited, as the country’s stocks are low.
“Domestic consumption is strong amid higher demand for food,” said the analyst.
“If port premiums continue to rise, we will see further speculation that Brazil may import soybeans into local supplies in order to release its production for export to China.”
Noting that China usually buys Brazilian soy at this time of year, Asians have changed their minds and decided to buy loads of American soy as a gesture to ease the trade war between the two countries.
Last week, for example, Asians purchased approximately 135,000 tonnes of US soybeans, which is almost half the amount that should be shipped during this period.
In general, since the beginning of the Sino-US trade war, Brazilian soy exports to China have grown by more than 50%. In February, US Secretary of Agriculture Sonny Perdue stated that China has committed to buy an additional ten million tons of US soy. According to data from the US Department of Agriculture (USDA), China is yet to buy about seven million tons of soybeans to comply with the deal.
In early May, US President Donald Trump announced that he planned to introduce new tariffs on Chinese products. As a result, as of May 10, US tariffs on a range of Chinese products have been raised from 10 percent to 25 percent on goods worth $200 billion.