- Memorandums for 13.18 million tons, more than double 2014 deal
- Sales valued at $5.3 billion set after annual meeting in Iowa
Members of a trade delegation from China, the world’s top soybean importer, signed memorandums to buy a record 13.18 million metric tons of the oilseed worth around $5.3 billion from U.S. shippers after annual negotiations.
U.S. industry representatives and members from the Chinese delegation announced the agreements on a conference call after talks in Des Moines, Iowa. U.S. shippers outlined in 24 memorandums included Archer-Daniels-Midland Co., Cargill Inc. and Louis Dreyfus Group. The cargoes are set for delivery by Aug. 31, according to the U.S. Soybean Export Council.
China will import a record 79 million tons from around the world in the year that began Oct. 1, the U.S. Department of Agriculture said this month. The country’s total demand has soared 35-fold since 1997 as the economy boomed. As of Sept. 17, U.S. sales to the Asian nation in the 12 months ending Aug. 31 were 55 percent behind the pace a year earlier, agency data showed.
“China’s buying is a sign they like the price, and that’s what is important,” Dale Durchholz, the senior market analyst at AgriVisor LLC in Bloomington, Illinois, said in a telephone interview. “China’s economy is still growing, albeit at slow pace, and the slow U.S. sales pace to date should be seen as an opportunity.”
Last year, members of the Chinese delegation agreed to buy 4.8 million tons valued at $2.3 billion from U.S. shippers after a trade visit. The Asian nation buys soybeans to make feed for livestock.
Thursday’s soybean accord came during President Xi Jinping’s first state visit to the U.S., underscoring the agricultural trading interests of the two nations.
China is the largest pork producer, and the U.S. the top grower of the oilseed used to make animal feed.
On Wednesday, Boeing Co. got a jet order worth $38 billion from Chinese carriers.
“This is an annual event and unlikely to dramatically change the slow pace of U.S. exports overall” with rising competition from record-high crops in South America, Richard Feltes, the head of market insights at Chicago-based R.J. O’Brien & Associates LLC, said in a telephone interview. “China’s buying of U.S. commercial aircraft and soybeans is a clever public relations offensive designed to enhance leverage” during Xi’s meetings that start Friday with President Barack Obama in Washington, Feltes said.
On Thursday, soybean futures for November delivery rose 0.5 percent to close at $8.68 a bushel on the Chicago Board of Trade. The price has dropped 15 percent this year.
(An earlier version corrected the tonnage amount in third headline and first paragraph.)