Chinese soybean buyers look to delay US soybean imports
Jun 14, 2019 (China Knowledge) - Chinese soybean buyers are now asking sellers in the United States to delay cargo shipments due to be shipped in July to August, sparking fears that these orders could potentially be cancelled.
These negotiations come as the two countries remain embroiled in a protracted trade war that saw China cutting purchases of soybeans from the US sharply starting from mid last year.
During then, soybean imports from the US fell to nearly zero until China agreed to buy 14 million tons of the crop from American farmers after trade negotiations during a temporary truce between December to March.
More than 6 million tons of soybeans have now been shipped to China this year but another 7 million tons are still awaiting shipment when trade talks started to breakdown in May this year.
Delaying shipments may potentially amplify problems that US exporters are already facing due to a large backlog of soybeans still awaiting shipments due to widespread flooding in the US Midwest.
Currently, Chinese companies are trying to roll about 2 million tons worth of July cargoes into August. While an August rollover is not a large concern for US exporters, should there be further delays into September, problems may then arise as the US new-crop harvest are set to be due in September causing stocks to swell up and prices to fall.
The recent delays may be aimed at trying to buy more time for China to give it the option of cancelling these cargoes should trade talks continue to go south.
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