December 19, 2003

 

China To Buy 2.5 Million Tons US Soy

 

A Chinese trade delegation in Chicago agreed to buy 2.5 million tons of soy from the United States, strengthening bilateral farm-trade relations as the nations struggle with other trade issues.

 

In a signing ceremony at the Chicago Board of Trade (CBOT), spokesman Cao Xu Min said the companies, which crush soy into animal feed and cooking oil, would buy an additional 2.5 million tons if they find the price to be reasonable. China is the world's top soy importer.

 

"This is another positive step in our trade relations with China," said Gary Martin, president of the North America Export Grain Association that arranged U.S. grain firms to meet with the Chinese team of private companies on Wednesday.


Martin said he was optimistic that a similar wheat-buying delegation scheduled to take place in US early next year.

 

Thursday's signing ceremony was the culmination of the rescheduling of the soy mission about two weeks after Premier Wen Jiabao held talks with President George W. Bush.

 

"Ever since China and the U.S. established diplomatic relations, economic and trade cooperation between the two countries have been progressing strength by strength," said Chinese Vice Minister of Commerce Liao Xiaoqi at the signing.

 

He said bilateral commodity trade has soared from just$2.45 billion in 1979 to $97.2 billion in 2002, adding that the United States is China's second-largest trading partner.

 

Liao said China's domestic demand for soybeans is spurred by increasing living standards.

 

The growing affluence in China, the world's most populous nation, is also feeding demand for soy by changing the diet of its citizens to include more meat, U.S. analysts said. China, the largest market for U.S. soybeans, has bought 7.4million tons of U.S. soybeans worth about $2 billion since the current U.S. marketing year began on September 1. It bought 4.5million tons over the same period a year ago.

 

In November, the U.S. Agriculture Department raised its forecast for Chinese soybean imports by 2 million tons to 22million from all sources in the 2003/04 marketing season. The visiting Chinese team said that companies involved in the supply of the U.S. soybean shipments included Cargill Inc., Bunge Ltd., Louis Dreyfus Corp., CHS Inc., Zennoh, Archer Daniels Midland Co. and Toepfer International.

 

The China Chamber of Commerce's Cao said most of the 2.5 million tons of soybeans the Chinese companies purchased would be shipped in the first quarter of next year.

 

He said the Chinese buyers had been negotiating with U.S. suppliers over prices the past two to three weeks.