May 13, 2011

 

 

China is in talks with Argentina to buy up to 400,000 tonnes of soyoil and an unspecified amount of corn, officials and analysts said Thursday (May 12).

 

A final decision is yet to be reached, said analysts said.

 

Market expectations of an imminent deal have heightened as Chinese Commerce Minister Chen Deming is on a visit to Argentina, the first such visit by a Chinese commerce minister in seven years.

 

However, an Argentine government official said a deal could not be confirmed yet.

 

Chinese imports of Argentine soyoil have been weak this year, with the Argentine industry suspecting Chinese retaliation for limits imposed on the import of Chinese manufactured goods. Chinese officials, on the other hand, have been blaming weaker demand.

 

Chen arrived in Buenos Aires Wednesday for a visit aimed at strengthening bilateral trade relations, according to reports.

 

Talks are scheduled with Argentine President Cristina Fernandez, Foreign Minister Hector Timerman and Industry Minister Debora Giorgi.

 

"Since last year, Argentina has adopted a series of measures aimed at restricting the import of Chinese products, inflicting adverse impacts on bilateral trade," sources said.

 

China was the biggest buyer of Argentine soyoil until a trade dispute early last year led to a suspension of imports. The spat was smoothed over by the end of the year, but Argentine soy industry suspected China imposed a de facto resumption of the suspension early this year as the South American nation extended restrictions on Chinese manufacturers.

 

Argentina, the world's largest soyoil exporter, accounted for just 12% of China's soyoil imports last year, a sharp drop from 2009 when it accounted for 77% of the Asian country's intake, according to Chinese customs data.

 

China's soyoil imports totalled 1.34 million tonnes last year and reached 300,843 tonnes in the first three months of this year.

 

"A 300,000-400,000-tonne import (from Argentina) wouldn't be considered abnormally large," experts said.

 

Meanwhile, China's soy yield is expected to reach 14.8 million tonnes this year, 400,000 tonnes less than that of the previous year, according to a forecast released by the USDA Wednesday (May 11).