May 16, 2007

Chinese delegation signs pacts to buy 5.76 million tonnes of US soy

Fourteen Chinese soybean processing companies that represent the majority of the soybean purchasing power of China signed 17 contracts with US agricultural exporters to buy 5.76 million tonnes of US soybeans at a signing ceremony held Monday at the Chicago Board of Trade.

The Chinese purchases, made with eight US agricultural exporters, were valued at US$2.07 billion, said Ma Xiuhong, China's Vice Minister of Commerce, at the signing ceremony.

Monday's (May 14) soybean purchase agreements are the first the delegation will make on a 10-day tour of the US Additional contract agreements will be signed for further purchases in Iowa on Thursday, according to the US Soybean Export Council.

The contract signings represent new soybean purchases. China is the leading export market for US soybeans, representing 36.3 percent of China's total agricultural imports, Ma said.

The size and value of the signings was a pleasant surprise to the US soybean industry, with the deals expected to total in the neighbourhood of US$500 million, US industry representatives said at a press conference following the signings.

The deals represent 212 million bushels, over half of the projected total of 404 million estimated for China by the industry in 2007, said Dan Duran, chief executive of the US Soybean Export Council.

The US exporters involved in Monday's signings included Archer Daniels Midland (ADM), Louis Dreyfus, Bunge North America, Toepfer, Cargill, CHS and Zen Noh Grain Corp.

The Chinese delegation was comprised of Yihai Investment Co. Ltd., COFCO, Chinatex Grains and Oils Import and Export Co. Ltd, Jilin Grain Group Import and Export Co. Ltd., Guangzhou Green Oil Co. Ltd, Bunge International Sanwei Co., Bunge International Nanjing Co., Cargill Investment China, Dalian Huanong Group, Heilongjiong Jiusan Oil and Fat Co. Ltd, Henon Cereals and Foodstuff Import and Export Co., Shandong Sanwei Fats Group, Shandong Bohi Oils Fats Group, and Orient International Group Shanghai Foreign Trade Co.