Trade continues amid Argentina, China soy spat

Despite a looming threat by Chinese authorities to block Argentine soyoil imports, Argentine traders are banking on a quick resolution to the conflict and are loading more boats destined for China.

Chinese importers are continuing to buy Argentine soyoil, boats are being loaded and the price has not fallen, according to traders.

The controversy has raised political tensions between the two countries, as Argentine officials suspect the move is retaliation for trade barriers it had imposed on Chinese imports during last year's global economic crisis.

China has denied this, saying new procedures were introduced April 1 as Argentine soyoil wasn't meeting stringent quality requirements. Argentina has said the measure unfairly targets its oil production.

The extent of China's threat would not be known for another month, when the first ships loaded with soyoil from this year's soy harvest will start to arrive in Chinese ports after the 45-day trip, said a trader at a leading Argentine exporter.

Soy and their derivatives are Argentina's main export, and China is the top buyer, importing US$1.35 billion in soyoil and US$1.21 billion in soy from Argentina last year, according to data. About 77% of China's soyoil imports last year came from Argentina.

Argentine Industry and Tourism Minister Debora Giorgi said Argentina had not banned any Chinese imports, but had used measures approved by the World Trade Organization when there were cases of unfair competition.

Meanwhile, Argentina is expecting a record soy crop of 55 million tonnes this year, with 11 million tonnes of that likely to be processed into 2.2 million tonnes of soyoil for shipment to China, according to Argentina's Agriculture Ministry.

But with the issue out of their hands, soyoil exporters are crossing their fingers for a quick political resolution to the problem.