SINGAPORE/BEIJING, Sept 23 — Chinese buyers booked at least 10 cargoes of Argentine soyabeans after Buenos Aires scrapped grain export taxes on Monday, three traders said on Tuesday, dealing another setback to United States (US) farmers already shut out of their top market and hit by low prices.
Argentina's temporary tax move boosts the competitiveness of its soyabeans, prompting traders to secure cargoes for fourth-quarter inventories in China, a period usually dominated by US shipments but now clouded by Washington's trade war with Beijing.
The Panamax-sized shipments of 65,000 metric tons each are scheduled for November, with CNF (cost and freight) prices quoted at a premium of US$2.15 to US$2.30 per bushel to the Chicago Board of Trade (CBOT) November soyabean contract, two traders with direct knowledge of the matter said.
One of the traders said Chinese buyers had booked 15 cargoes.
The deals are a fresh blow for US farmers, who are missing out on billions of dollars of soyabean sales to China halfway through their prime marketing season as unresolved trade talks freeze exports and rival South American suppliers led by Brazil step in to fill the gap, traders and analysts have said.
"These deals were done last night after Argentina's decision on export tax. It clearly means that China does not need US beans," said one of the traders, declining to be identified as they were not authorised to speak to the press.
China, the world's biggest buyer of soyabeans, has yet to purchase any US soyabean cargoes from its autumn harvest, traders have said.
On Friday, Chinese President Xi Jinping and US President Donald Trump held a phone call, but neither side reported any update on agriculture, further squeezing Chicago soyabean futures already near five-year lows.
Earlier this month, Reuters reported that China had nearly completed soyabean purchases for October shipment and booked around 15 per cent of its November needs, all from South America. By that time in previous years, traders said, China would have bought 12 to 13 million tonnes from the US for the September-November shipment.
Temporary tax break
Argentina's government said the temporary grain tax suspension will last through October, or until declared exports reach US$7 billion (RM29.39 billion), a move that drove Chinese soyameal futures lower on Tuesday.
As of 0639 GMT, China's most-active Dalian soymeal futures were down 3.5 per cent, and the most-active Dalian soyabean oil futures dropped 3.5 per cent.
"The decline in prices was mainly due to Argentina's removal of grain export taxes yesterday, which made prices more attractive to Chinese buyers, given the favourable crushing margins
"But the impact of this news is likely to be short-lived, as the policy will last for just over a month and Argentina's overall supply is limited," said Beijing-based AgRadar Consulting's founder Johnny Xiang.
Argentina typically imposes a 26 per cent export tax on soyabeans.
China's soyabean imports hit record highs in May, June, July and August, boosting inventories, partly as a hedge by buyers against potential fourth-quarter supply disruptions.
"Looking ahead, the key factors to watch are actual Argentine soyabean purchases and arrivals, along with the outcome of US-China talks and how they might affect soyabean imports in the fourth quarter and early next year," said Capital Jingdu Futures analyst Wan Chengzhi.
