China Restricts Soy Imports
On Thursday, China reportedly slapped restrictions on soybean imports from the United States, Brazil and Argentina for supposed quality problems.
The move, which appears to be a thinly veiled attempt to slow surging soybean imports and prop up domestic prices ahead of harvest is expected to draw strong reactions from U.S. officials.
One U.S. grain company official told Reuters News Service: "I would characterize it as a very inflammatory move, a non-tariff trade barrier. What I hear is this will ignite a firestorm of reprisals from the highest diplomatic levels."
Traders told Reuters there was talk of several major companies being placed on a "blacklist" by China, effectively preventing them from shipping soybeans to the country for an unspecified period due to soybean quality problems.
A spokesman for Bunge Ltd., the world’s No. 1 oilseed processor told Reuters that China’s imposition of the restrictions was conveyed to the firm through the U.S. agricultural attache in Beijing on Thursday. He said China cited quality issues for the restrictions, but it did not give details.
Traders told Reuters soybean shipments from the United States would be restricted for Bunge, Louis Dreyfus, Toepfer and Zennoh.
The Bunge spokesman said the company had been informed it would not be allowed to ship U.S. soybeans to China on a cost-and-freight basis, but could ship on a free-on-board basis, meaning Chinese importers will have to make shipping arrangements, something they have no experience at doing.
Editors note: Richard Brock, The Corn and Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.