ARGENTINA – The world’s top soymeal producer by volume, Argentina has reached an agreement to export the product to China, marking the first soymeal shipment that Argentina has made to China.
According to a report by Reuters, Gustavo Idigoras, president of Argentina’s CIARA-CEC chamber of grain exporting companies, however, noted that the deal is still subject to a two-step process of plant authorizations and then registrations.
The deal, which follows decades of talks, is arguably a major breakthrough amid the US-China trade war that has hit US growers.
The deal paves the way for Argentine farmers and soy processors to send shipments to China from early 2020. The pact was signed by Argentine and Chinese officials in Buenos Aires, Argentina.
China, which only imports a small amount of soymeal each year, is the world’s largest soymeal consumer at an estimated annual consumption of 67 million tonnes of soymeal.
In 2019-20, it is forecast to consume 66 million tonnes of soymeal, double the amount of the United States, which ranks second in consumption.
Argentina is forecast to export more than 30 million tonnes of soymeal in 2019-20, according to the U.S. Department of Agriculture. The country’s top export markets for the feed are currently Europe, Vietnam, and Indonesia.
Gustavo said he did not expect Argentina to “export an important volume to China in the first year’” but maintained that “ having 2 or 3 million tonnes in the market in 2020 would be symbolic in terms of building confidence and developing future business.
“It is excellent and timely news. Argentina needs to add more value to its exports to China and the world,” said Luis Zubizarreta, president of Argentina’s ACSOJA soy industry organization that represents farmers, exporters and seed firms.
The U.S. and China are taking steps to ease tensions in their trade war, as negotiators prepare for the resumption of face-to-face talks in Washington in the coming weeks.
Meanwhile, the agricultural ministry of Russia, the world’s largest wheat exporter, said it expects China to open its market for imports of wheat produced all regions of Russia within a year.
Russia joins Argentina and Kazakhstan who are aiming at increase agricultural exports to China the world’s largest importer of agricultural products.