Chinese state soybean buyers asked U.S. exporters to delay cargoes scheduled for July loading into August, citing limited availability of storage capacity, according to people with knowledge of the situation.
The request is for as much as 2 million metric tons of American soybeans, said the people, who asked not to be identified as the information is private. The buyers requested to delay the U.S. shipments due to a large number of vessels carrying South American supplies arriving at the same time, the people said.
China, the world’s top importer, bought about 13 million tons of U.S. soybeans after the countries agreed to a truce in their trade war in December, according to American government data, in a move that was seen as a gesture of goodwill to help resolve the dispute. The country has since put purchases on hold because of a worsening in tensions, people said last month.
The odds of a deal to end the trade war have faded in recent weeks, with President Donald Trump threatening to raise tariffs on $300 billion of Chinese goods, and Beijing saying it’ll “fight to the end.” Trump is still waiting for a response from President Xi Jinping about meeting at the G-20 leaders’ summit at the end of the month in Japan, according to economic adviser Larry Kudlow.
The Chinese buyers also asked for some soybean cargoes to be shipped from the U.S. Pacific Northwest instead of the U.S. Gulf, said the people. Vessels normally take 45 days to sail to China from the Gulf area, while it can be as short as 18 days from the west coast. Spokespeople for state-run buyers Sinograin and Cofco didn’t immediately respond to email inquiries seeking comments.
U.S. soybean exports tumbled about 16% in 2018 after China slapped 25% retaliatory tariffs on American farm imports as part of the trade dispute. Chicago futures have climbed more than 10% in the past month as rains and flooding delayed planting of the American soy crop. In the middle of May, the most active contract hit the lowest since 2008 because of a global glut.