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China buys US soybeans after halt to US purchases ordered: sources

The purchases, totalling at least 180,000 tonnes of the oilseed, were for shipment in October or November, the peak US soy export season when American soybeans are usually the cheapest in the world.

[CHICAGO] State-owned Chinese firms bought at least three cargoes of US soybeans on Monday, even as sources in China said the government had told them to halt purchases after Washington said it would eliminate special treatment for Hong Kong to punish Beijing.

The purchases, totalling at least 180,000 tonnes of the oilseed, were for shipment in October or November, the peak US soy export season when American soybeans are usually the cheapest in the world, three US traders with knowledge of the deals said.

It was not immediately clear why buying continued after Beijing's message to state-owned firms, but US traders said Chinese importers still have not covered a large share of October and November soybean needs.

"It's murky, really hard to say," said one US export trader. "Maybe they wanted to knock a few cents off the price, or maybe there's some other agenda. They do need the beans."

Earlier, two sources familiar with the matter said China told state-owned firms to halt large-scale US soybean and pork purchases. One of them said state purchases of US corn and cotton have also been put on hold.

The soybean sales on Monday were small compared to recent purchases by state-owned firms totalling one million tonnes or more at a time.


Any sustained halt in buying would further threaten progress in meeting goals set in the Phase One trade deal signed in January. China pledged to significantly boost purchases of US agricultural products, after slashing imports during the bruising trade war.

The US Department of Agriculture (USDA) and US Trade Representative's office did not immediately respond to requests for comment.

Chinese foreign ministry spokesperson Zhao Lijan told reporters during a daily briefing Tuesday that he was unaware of the situation.

On Friday, US President Donald Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong in response to China's plans to impose new security legislation. China said on Monday it will counter US attempts to harm Beijing's interests.

Chinese importers cancelled 10,000 to 20,000 tonnes of American pork shipments, equivalent to roughly one week's orders in recent months following Mr Trump's comments on Friday, the source said.

In a worst-case scenario, if Mr Trump continues to target China, Beijing will scrap the Phase One deal, a second source familiar with the government plan said.

"There's no way Beijing can buy goods from the US when receiving constant attacks from Trump," the person said.


Under the initial trade deal, China pledged to buy an additional US$32 billion worth of US agriculture products over two years above a baseline based on 2017 figures.

The USDA reported that China bought US$1.03 billion worth of soybeans and US$691 million of pork in the first quarter of 2020. China also bought corn, wheat and soyoil this year.







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