Chinese state agricultural conglomerate Cofco Group recently bought a batch of soybeans amounting to “millions of tonnes” from the United States, it said in a notice on Saturday.
The purchase was part of the company’s efforts to implement a “consensus” on trade agreed between China and the United States, it said in a notice on its website.
Soybeans have been a crucial element in simmering trade tensions between the two countries. China – the world’s biggest soybean importer – cut off purchases from the US in 2018, sending prices tumbling and leaving farmers struggling to sell off their record harvest.
Purchases ceased in July after Beijing slapped 25 per cent tariffs on US soybeans and other goods, retaliating against similar tariffs imposed by Washington.
The tit-for-tat trade war was enough to bring full-year Chinese soybean exports from the US down to their lowest level since 2008, with shipments down by half at 16.6 million tonnes.
However, the two countries agreed a 90-day truce at the beginning of January, allowing China to resume purchases.
China offered to buy another 5 million tonnes of US soybeans in the latest round of trade talks, a White House official said on Thursday.
But market analysts warned US exports to China were unlikely to return to previous levels even if the two countries settled their trade dispute, with China expected to turn more to South America and other suppliers.
Xiaoping Zhang, a regional director of the US Soybean Export Council, said any purchase of soybeans would be good news for American farmers.
“It is my hope that the soybean trade with China will be helpful to get trade issues resolved and will be further expanded in the future based on the partnership with the Chinese industry since 1982,” Zhang said. “From the news releases by both governments, all messages are believed to be positive, showing progress being made to reach a final deal before the 90-day period ends. Now I am more optimistic than ever for a deal that will benefit the industries of both countries”.