China Turns Back to Brazilian Beans After Trade War Escalation
(Bloomberg) -- Chinese buyers are turning to Brazilian soybeans after another escalation of tensions between the U.S. and China.
Buyers from the Asian nation are bidding for Brazilian soy for shipment in August, September and October, according to people familiar with the matter who asked not to be identified because talks are private. China is seeking to buy from Brazil after President Donald Trump's announcement Thursday on additional tariffs, a person with knowledge of the matter said.
For now, China's state-owned companies don't plan to cancel cargoes of previously-purchased U.S. soy or annul permits given to crushers to buy American oilseed without tariffs, people familiar with the matter said.
The prospect of China stepping up purchases has pushed up Brazilian prices. The premium for October at Paranagua port soared 11% Friday to 99c a bushel, data from Commodity 3 show.
While China usually buys Brazilian soy at this time of the year, buyers had bought some U.S. cargoes recently as goodwill ahead of trade talks. In the week ended July 25, China bought about 135,000 metric tons of American beans, about half of which were due to be shipped in the season ending Aug. 31, Department of Agriculture data showed Thursday. About 4.25 million tons of U.S. soybeans are scheduled to head China before the end of the month.
Brazilian supplies available for shipment are limited as domestic inventories are low, according to Ana Luiza Lodi, an analyst at INTL FCStone.
“Domestic consumption is strong amid higher demand for feed,” she said by telephone from Campinas, Sao Paulo. “If premiums at ports keep rising, we'll see renewed speculation on the possibility of Brazil importing soybeans for local supplies to free its own production to export to China.”
--With assistance from Michael Hirtzer and Dominic Carey.
To contact Bloomberg News staff for this story: Isis Almeida in Chicago at ialmeida3@bloomberg.net;Niu Shuping in Beijing at nshuping@bloomberg.net;Tatiana Freitas in São Paulo at tfreitas4@bloomberg.net
To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net
©2019 Bloomberg L.P.
With assistance from Bloomberg
-
A New Samvat Wishlist: Inclusive Prosperity And Human Development
India has strengthened its economic foundations through infrastructure, digital access and enterprise. Its next growth chapter must deepen productivity, create better livelihoods and widen participation in prosperity.
-
Love, Sex Aur Dhokha: The Audacious Plot To Spy On Jensen Huang
A Taipei dinner, a Singapore chip buyer and a suspected Chinese asset: inside the alleged spy operation that got close to NVIDIA's Jensen Huang.
-
Ten Things I Learnt This Samvat
Patience can be a trap. Cheap stocks can stay cheap. Leverage can wipe you out. What did Samvat 2082 teach us? Niraj Shah writes on 10 lessons from the year gone by.
-
Talking Points This Week: Tech Nerves, FII Buying, And A Faraway Banking Shock
The global markets are not shining this Diwali. The exception in the large markets is, India.
-
Midterm Rally Lasted A Day. The Hard Reality Of A Divided US May Last Two Years | Opinion
Between a contested AI boom, a debt ceiling that arrives in 2027 and a president with every incentive to act alone, the next two years may prove more volatile than the first day's rally suggests.
-
Blue Wave Will Derail the AI Trade but Won't Dismantle the AI Era | Unhedged Position
The Democrats' sweep of the US Congress will see politics collide with economic forces both over the long and short term.
-
It's Time To Take The GST Council's Bet On Trust Global
Payment records can prove India's services exports, and clear, proportionate rules can bring foreign digital sellers into the tax net.
-
Opinion | India at 38: From Innovation Overperformer to Innovation Powerhouse
India now has 453 VC-backed deep science startups, 18 of them late-stage, after 117 percent growth since 2020. Laurus Labs, at USD 9.3 billion, is the most valuable deep science company in any middle-income economy outside China.
-
Navigating Energy Crossroads: S Jaishankar's Call For Diversified Supply Chains At G20 Ministerial Meeting
As geopolitical fault lines continue to test maritime trade routes and commodity flows, Jaishankar's message remains pertinent: true economic resilience requires open markets, protected transit lines, and a genuine commitment to multilateral cooperation rather than coercion.
