Tensions crimp American soya bean sales to China

Workers in Qinhuangdao, Hebei, yesterday inspecting tofu. US farmers rely on China as the top buyer of soya beans, the main ingredient of tofu.
Workers in Qinhuangdao, Hebei, yesterday inspecting tofu. US farmers rely on China as the top buyer of soya beans, the main ingredient of tofu.PHOTO: REUTERS

NEW YORK • US soya bean sales to China ground to a halt after Beijing threatened tariffs on imports, the chief executive of agricultural trader Bunge said on Wednesday, the latest sign of mounting trade tensions upsetting the global flow of commodities.

Countries such as Brazil and Canada are increasing soya bean sales to China after Beijing's threat last month to impose a 25 per cent tariff on imports of US soya beans, Bunge's Mr Soren Schroder said in an interview.

US farmers rely on China as the top buyer of soya beans, but at a current price of about US$420 per tonne, that translates to a potential tax of more than US$100 per tonne on shipments.

"Nobody's willing to take the risk of committing to US soya beans to China in the current context, knowing that there could be a US$100 penalty from one day to the other, and no way of managing that risk," Mr Schroder said after the company reported a quarterly loss.

Soya beans were the US' most valuable agricultural export last year to China, which bought US$12 billion (S$16 billion) of the crop.

But sales to China over the last four weeks are down 10 per cent from this time a year ago.

REUTERS

A version of this article appeared in the print edition of The Straits Times on May 04, 2018, with the headline 'Tensions crimp American soya bean sales to China'. Print Edition | Subscribe