The US government announced an order from China for more than half a million tonnes of US soybeans, just hours before a meeting between US President Donald Trump and Chinese President Xi Jinping that may lead to a de-escalation of the nations’ trade war.
The 544,000-tonne order, reported on Friday by the US Department of Agriculture (USDA), is the biggest sale to the country since it booked 828,000 tonnes of the oilseed from US growers on April 1, before trade talks broke down.
Trump and Xi will meet on Saturday on the sidelines of the G20 summit in Osaka, Japan. It will be their first face-to-face discussion since they called a truce on tariffs in December at the previous G20 summit in Argentina – a ceasefire that ended last month when negotiations stalled.
American soybean farmers, already hit hard by unfavourable weather, have sustained more damage in the trade war than most industry groups.
The value of China’s US soybean imports fell by three-quarters in 2018 to US$3.13 billion from US$12.23 billion in 2017, according to US Census Bureau data.
As of May 30, outstanding sales and accumulated exports of US soybeans to China in the current marketing year, which ends on August 31, totalled 13.6 million tonnes compared with 28.7 million tonnes a year ago, according to government data.
Beijing targeted American soybeans in the first round of tariffs after Trump imposed punitive duties on Chinese goods on July 6 last year and buyers there have since turned to Brazilian suppliers.
The USDA estimates identify China as the leader in global soybean imports at 58 per cent of trade, though that is down from a peak of 65 per cent in the 2016-17 marketing year. The country’s soybean imports are projected to be 87 million tonnes in the current marketing year.