China is the world’s top buyer of soybeans, the most valuable US export crop.
BEIJING: China’s Commerce Ministry said on Tuesday that Chinese companies have stopped buying US agricultural products, and that China will not rule out imposing import tariffs on US farm products that were bought after Aug. 3.
The moves by China represent the latest escalation in its trade row with the United States, and comes after China let the yuan weaken past the key 7-per-dollar level on Monday for the first time in more than a decade.
US President Donald Trump said on Thursday that Beijing had not fulfilled a promise to buy large volumes of US farm products and vowed to impose new tariffs on around $300 billion of Chinese goods, abruptly ending a truce in the Sino-US trade war.
Earlier, China’s state broadcaster CCTV reported an official from China’s National Development and Reform Commission (NDRC) as saying Trump’s accusations were “groundless.”
China is the world’s top buyer of soybeans, the most valuable US export crop. The Trump administration has announced plans to spend up to $28 billion compensating US farmers, a key Trump constituency, for lost income from trade disputes.
“Related Chinese companies have suspended purchases of US agricultural products,” China’s Ministry of Commerce said in an online statement posted shortly after midnight in Beijing on Tuesday.
The statement said China hoped the United States would keep its promises and create the “necessary conditions” for bilateral cooperation.
China bought 130,000 tonnes of soybeans, 120,000 tonnes of sorghum, 60,000 tonnes of wheat, 40,000 tonnes of pork and products, and 25,000 tonnes of cotton from the United States between July 19 and Aug. 2, the NDRC official said.
Overall, China has purchased about 14.3 million tonnes of last season’s crop, the least in 11 years, and some 3.7 million tonnes still need to be shipped, according to US data. China bought 32.9 million tonnes of US soybeans in 2017, before the trade war.
Benchmark US soybean futures turned negative on the Commerce Ministry’s announcement.
China is honouring agreements signed earlier to import US soybeans, the official said, noting that 2.27 million tonnes of US soybeans had been loaded and shipped to China in July, since Trump met Chinese President Xi Jinping in Osaka at the G20 summit at the end of June, according to Cong Liang, secretary general of China’s NDRC, CCTV reported.
Weekly US data on Aug. 1 confirmed the first new US soybean sale to China since June, of 68,000 tonnes from the crop that will be harvested this fall. Additional sales through Aug. 1 could be recorded in the next US government export sales report on Thursday.
Two million tonnes of US soybeans destined for China will be loaded in August, followed by another 300,000 tonnes in September, Cong said.
However, the US Department of Agriculture said on Monday less than 600,000 tonnes of soybeans were inspected for export to China the week ended Aug. 1, fewer than the previous week.
The National Pork Producers Council said in an e-mail in response to the commerce ministry statement it continued to reiterate the importance of ending the trade dispute with China so US pork producers can get back to competitive access.
Source: The Economic Times