June 10, 2010
The Argentine trade mission sent to Beijing was unable to lift the soyoil ban for export to China.
The Argentine delegation returned with the promise that further talks will be taking place but no dates were revealed. "This is a long negotiation process: we were not expecting definitive decisions at the bilateral meeting," said Alfredo ChiaradÃa, International Economic Relations Secretary.
Since last April, China has ceased purchased of Argentine soyoil in retaliation for anti-dumping restrictions to Chinese imports imposed by Argentina. However, the formal excuse refers to sanitary reasons and residual percentages of certain by products in the oil from crushed soy.
The ban could mean significant losses for Argentina's oil market and for government revenues. The annual production of soyoil is Argentina is four million tonnes of which China absorbs 1.87 million, according to the official statistics from 2009, which represent 46% of total production.
Furthermore Chinese soy crops have been good and the processing capacity has been dramatically increased according to oil industry sources, so the temporary spat with Argentina, even if later overcomes, could have long term implications.
The possible loss of the Chinese soyoil market represents 600 million US dollars less revenue from export duties for the Argentine government.
China is forecasted to import 46 million tonnes of the soy this year on increased demand for vegetable oil and animal feed.
"The gain in China's meat consumption is closely related to its GDP growth" which is accelerating this year said Cao Zhi, director at the China National Grain & Oils Information Center. "Soyoil imports in 2009-2010 may tumble 40% to 1.5 million tonnes after the government banned shipments from Argentina," Cao added.
