|End-of-day quote - 11/20|
Exclusive: China to inspect Argentine crushers, could unlock No. 1 soymeal market
|07/30/2019 | 12:19pm|
BUENOS AIRES (Reuters) - A Chinese delegation is set to visit Argentina in August to inspect soymeal crushing plants, Argentine government and industry officials told Reuters, a key step as the South American country looks to open up exports of processed soy to the world's No. 1 consumer.
Argentina, the top global soymeal exporter, has tried for years to break into the China market, the biggest consumer of the meal which it uses to feed its giant hog herd. China, with its own crushing industry to protect, has steadfastly resisted.
Global trade uncertainties - including pessimism about U.S.-China negotiations that start on Tuesday in Shanghai - has, however, strengthened Argentina's hand, grain traders said, prompting China to expand its soymeal import options.
"We will have a visit of Chinese officials as part of the process of pursuing the objective of exporting soybean meal to China," Santiago del Solar, chief of staff to Argentina's Agriculture Secretary, told Reuters.
China is the No. 1 buyer of Argentine soybeans but does not import any of its processed meal, which could be used to help feed the world's biggest hog heard as consumers in the country shift toward a diet of meal-fed pork and poultry.
"Argentina has spent 20 years trying to gain access to the Chinese soymeal market. In all that time, this is the first Chinese trade mission to Argentina specifically to discuss soymeal," Gustavo Idigoras, president of Argentina's CIARA-CEC chamber of grains exporting companies, said in an interview.
He added Chinese customs inspectors would arrive on Aug. 18 for a two-week trip and visit crushing plants operated by eight firms including Bunge Ltd, Vicentin, Molinos Agro SA, Louis Dreyfus Corp , Cargill Inc.
"It makes sense for the world's biggest and most efficient soymeal exporter to sell to the world's biggest consumer."
The firms did not immediately respond or declined to comment.
The meal manufactured in the giant crushing plants that dot the banks of Argentina's Parana River, clustered around the country's main grains hub of Rosario, is exported mostly to Southeast Asia, Europe and Northern Africa. China imports only small amounts of soymeal currently, none of it from Argentina.
Graphic: Argentina soy png,https://tmsnrt.rs/2MzR1pp
TRADE WAR SILVER LINING
The mission comes at a time when U.S. exporters are facing troubles getting farm goods approved by China due to the trade war raging between Washington and Beijing, which traders said may favour Argentina.
"This is a troubled time for the U.S.-China trade relationship. Maybe that's an opportunity for Argentina, specifically regarding value-added products like soymeal," said an executive at one of the Argentine crushing plants slated to be inspected. He asked not to be named.
U.S. President Donald Trump on Tuesday slammed what he called a "ripoff" trade deal with the Chinese, and warned the world's No. 2 economy against waiting out his first term in office to finalise any new deal.
"I think this time, China really feels the crisis and wants to guarantee (soymeal) supplies," said a Beijing-based grains trader on condition of anonymity. Another China trader said the impact would be less immediate, but was more a "back-up plan" for China given the trade dispute.
To be sure, China will remain overall much more focused on Argentine soybeans than meal. Chinese buyers currently buy over 70% of Argentina's total exports of raw beans.
Idigoras said he was confident that China would soon open the door to Argentine soymeal, as a massive dietary shift away from rice and toward protein in the Asian country increased demand for livestock feed.
He added it would likely take over six months following the mission for any exports, during which time inspectors would have to prepare a report from the trip regarding approvals and soymeal from each plant would have to be registered in China.
He estimated a first cargo would be around 35,000 tonnes.
"In March the Chinese vice minister of food security told me that the only questions remaining about Argentine soymeal were of price and quality," Idigoras said. "We offer the best of both, so we are very confident the mission will be a success."
(Reporting by Hugh Bronstein; Additional reporting by Hallie Gu in Beijing, Maximilian Heath in Buenos Aires, Karl Plume in Chicago; Editing by Adam Jourdan and Marguerita Choy)
By Hugh Bronstein
Exclusive: China to inspect Argentine crushers, could unlock No. 1 soymeal...
Exclusive: ADM CEO says wrong time for 'monster' acquisitions
Exclusive: Agribusiness giant ADM made buyout approach to Argentina's...