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Noting a pressing need for soybeans, a Chinese commerce official said Thursday that Beijing would encourage companies to buy U.S. agricultural products – as long as the price is right.
“With the adjusted tariffs, China will encourage companies to import agricultural products from the U.S. in line with market principles,” said Chen Chao, director general of the Department of American and Oceanian Affairs at China’s Ministry of Commerce, the South China Morning Post reported.
“As long as the price is competitive, the quality is good and supply is sufficient, I believe Chinese companies will reach many deals or sign intentions with U.S. exporters and farmers, he said, adding that China has a “massive” need for soybeans.
Soybean futures set back hard on Thursday, along with corn and wheat futures. Soybeans and meal saw apparent profit taking after recent strong gains. China, which had previously shunned U.S. soybean purchases, agreed late last month to resume imports, with the U.S. saying Beijing agreed to buy 12 million metric tons of the commodity over the final two months of this year and 25 million metric tons a year in the next three years.
China booked soybean cargoes last week. Chinese supply chain operator and property developer Xiamen C&D today said it had signed contracts totaling over $5.2 billion with seven agribusinesses and trading houses including Cargill and Louis Dreyfus Company in Shanghai. The contracts covered soybeans, corn and cotton among other goods, according to a social media account. But traders have been antsy over a lack of more detail from Chinese officials on buying plans and a lack of clarity around follow-through purchases after last week’s activity.
China on Wednesday said it would drop its 15% retaliatory tariffs imposed on U.S. ag goods for one year beginning March 10, but left in place a 13% tariff on U.S. soybeans, undercutting U.S. competitiveness versus Brazil.
U.S. adds phosphate and potash to critical minerals list
The U.S. Geological Survey on Thursday added phosphate and potash to a list of minerals deemed essential to national and economic security.
The American Soybean Association applauded the move.
“As we look toward the next planting season, soybean farmers are concerned about the increasing cost of farming inputs, including fertilizer,” said ASA President and Kentucky farmer Caleb Ragland, in a news release. “By recognizing phosphate and potash as critical minerals, the U.S. Geological Survey has underscored the importance of a reliable domestic fertilizer supply.”
Critical minerals are are defined under law as as those commodities which are essential to the economic or national security of the U.S.; have a supply chain that is vulnerable to disruption; and serve an essential function in the manufacturing of a product, the absence of which would have significant consequences for the economic or national security of the U.S.