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China Processor to Seek U.S. Soybeans Again After Tariffs Respite

China Processor to Seek U.S. Soybeans Again After Tariffs Respite

(Bloomberg) -- China is looking to tap U.S. soybeans once again after the nation gave the go-ahead for some processors to buy without tariffs.

At least one Chinese soybean processor was looking to buy American cargoes on Wednesday, according to people familiar with the matter. The bids were for supplies from the Pacific Northwest terminals for delivery in September and October, said the people, asking not to be identified because the information is private.

The Chinese government has approved five companies to buy some U.S. soybeans free of retaliatory import tariffs as trade negotiations between the two nations continue, people familiar with the matter said earlier Wednesday. The tariff-free quota for 2 million to 3 million metric tons will be part of a goodwill gesture toward the U.S., the people said.

China Processor to Seek U.S. Soybeans Again After Tariffs Respite

The move comes as senior U.S. officials are set to travel to China on Monday for the first high-level, face-to-face negotiations since talks broke down in May. President Donald Trump had complained that China hasn’t increased its purchases of American farm products, a promise he said was secured at a meeting with Xi Jinping at the Group of 20 summit in Osaka last month.

It’s still unclear if any soy deals have been concluded, the people said. Some traders were skeptical any transactions would be done as crush margins remain low and the spread of the African swine fever, a deadly pig disease, curbs Chinese demand for the oilseed used to make animal feed. Others also cited competition with South America, where prices are about the same level as U.S. supplies.

China Processor to Seek U.S. Soybeans Again After Tariffs Respite

China, the world’s top soybean buyer, purchased about 14 million tons of American soybeans since December, when Washington and Beijing first reached a truce in the tit-for-tat trade spat. That’s still down from the usual 30 million to 35 million tons of American supplies China usually buys a year.

--With assistance from Steven Yang and Niu Shuping.

To contact the reporter on this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net

To contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Millie Munshi, Reg Gale

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