China has used up almost all of its waivers to buy American soybeans that are free of retaliatory tariffs, according to people familiar with the matter, leaving a bleak outlook for agriculture markets as a deadline for a trade deal approaches.
Chinese buyers have nearly reached their quota of about 10 million metric tons, said the people, who asked not to be identified because the information is private. Beijing is also unlikely to issue new waivers for American supplies before progress is made in trade negotiations with Washington, one of the people said.
China has been issuing waivers that allow buyers to bring in U.S. soybeans without having to pay the 30% retaliatory tariffs Beijing adopted in response to American levies. China’s purchases of American supplies have been viewed as a barometer of the negotiations.
President Donald Trump will increase tariffs on China if an agreement can’t be reached, U.S. Commerce Secretary Wilbur Ross told Fox Business Network Monday, citing Dec. 15 as the “logical deadline.” At the same time, China wants tariffs to be rolled back as part of the Phase One deal, Global Times said in a tweet Sunday.
While China usually steps up purchases of soybeans from the U.S. during this time of year when it’s the peak soy sales season, it has instead been increasing imports from Brazil, the world’s largest exporter.
China may have already met more than half of its soybean needs for at least the first half of next year, especially given demand has fallen because of African swine fever, one of the people said. China’s Ministry of Commerce didn’t respond to a fax seeking comment.
Purchases of American soybeans by China stand at 9.3 million tons since the start of the season in September through Nov. 21, according to data from the U.S. Department of Agriculture.
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