China increases US soybean purchases ahead of Xi Jinping’s visit

China purchased around 1 mln t of US soybeans this week, Reuters reported, citing four traders. Buying intensified ahead of Chinese President Xi Jinping’s planned visit to Washington in late September.

Including the latest deals, China has already booked nearly half of the 25 mln t of US soybeans that Beijing, according to the White House, committed to purchase annually through 2028. State-owned Sinograin has been among the most active buyers recently.

USDA also reported on Wednesday a sale of 340 thsd t of US soybeans to China, while another 100 thsd t was sold to an undisclosed destination. The increase in Chinese demand comes as soybean stocks decline in Brazil, the world’s largest exporter.

At the same time, US shipments remain constrained by an additional 10% tariff imposed by China on American goods, including agricultural products. As a result, private Chinese crushers have largely stayed away from US soybeans. Removing the tariff could encourage them to return to the US market.

Following a meeting between the two countries’ leaders in May, Washington said China had agreed to purchase 25 mln t of US soybeans annually through 2028, as well as $17 bln worth of other US agricultural products each year. China has not yet officially confirmed either the stated purchase volumes or the date of Xi Jinping’s upcoming visit.

Tags: China, soybean, USA