Argentina Temporarily Lifts Export Tax on Soybeans, Chinese Buyers Place Big Orders, U.S. Farmers Face Further Impact
Three traders said on Tuesday that after Argentina abolished grain export taxes on Monday, Chinese buyers had at least ordered 10 ships of Argentine soybeans, which is another blow to U.S. farmers, who have already been excluded and hit by low prices. Argentina's temporary tax measures have enhanced the competitiveness of its soybeans, prompting traders to purchase soybeans for China's inventory in the fourth quarter. This period has traditionally been dominated by the procurement of U.S. soybeans, but it is now affected by the U.S.-China trade war.
Argentina is the world's largest exporter of soybean oil and soybean meal. It was reported that on September 22, the Argentine government announced a temporary exemption of export duties on agricultural products such as soybeans, soybean oil, soybean meal, corn, and wheat until October 31, with an export volume of $7 billion. This means that the export tariffs on Argentine soybeans, soybean oil, and soybean meal will temporarily be reduced from the current 26%, 24.5% to 0%
Reuters reported that two informed traders revealed that these Panamax ships will be loaded in November, each carrying 65,000 metric tons, with cost and freight (CNF) quotes premium of 2.15-2.30 dollars per bushel over the Chicago Board of Trade November soybean contract (SX25). A trader disclosed that Chinese buyers have ordered 15 ships of soybeans.
Traders and analysts said these transactions are undoubtedly another blow to U.S. farmers. Due to the frozen trade negotiations that have blocked soybean exports, and the involvement of South American competitors led by Brazil, U.S. farmers have missed billions of dollars in soybean exports to China, which is at the midpoint of the main selling season for U.S. soybeans.
A trader who requested anonymity pointed out, "These transactions were concluded last night after Argentina made a decision on the export tax. This obviously means that China no longer needs U.S. soybeans."
Traders explained that as the world's largest soybean buyer, China has not yet purchased any cargo of U.S. autumn soybean harvests. Last Friday, Chinese and U.S. leaders held a phone call, but neither side released any latest progress on agriculture, further squeezing the Chicago Board of Trade soybean futures main contract (Sv1), which is approaching a five-year low.
Reuters reported at the beginning of the month that China has basically completed the procurement of soybeans for October and has booked about 15% of the demand for November, all from South America. Traders said that in previous years, during this period, China would have purchased 12 to 13 million metric tons of soybeans shipped between September and November from the United States.
The Argentine government stated that the temporary removal of grain taxes will continue until October or until the declared export value reaches $7 billion. This move caused the Chinese soybean meal futures to fall on Tuesday. Argentina usually imposes a 26% export tax on soybeans.
The report indicated that China's soybean imports set new records in May, June, July, and August, leading to increased inventories, partly due to buyers' hedging measures to avoid potential supply disruptions in the fourth quarter.
Original: www.toutiao.com/article/1844075998753804/
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