China’s government appears to have ended a six-month-old ban on imports of soyoil from Argentina, but soyoil trade between the two countries may be slow to resume due to unattractive prices and low supplies.
Chinese buyers have been able to get official clearance for imports of Argentine soyoil this week, a senior trader with a large Chinese grain buyer told Dow Jones Newswires on Tuesday. "The trading dispute was dissolved last night," the trader said. "We have no problem in getting clearance (for such imports)."
China shut down trading in Argentine soyoil at the start of April citing unacceptable levels of processing solvents, though the move appeared to be in retaliation against anti-dumping measures imposed on a number of Chinese goods.
However, COFCO Ltd., China's large state-owned grain trader, apparently hasn't booked any new soyoil cargos from Argentina despite media reports of new purchases.
"(The government authority) has mentioned the resumption, but it has not yet implemented it," a COFCO executive told Reuters News Service.
"The lifting of the ban is because of political reasons, not because of prices," added the executive, who declined to be identified.
Other traders told Reuters that China's government, which is constantly on alert for commodity price spikes that could feed through into wider inflation, was trying to let some steam out of soy prices.
However, domestic soyoil is a cheaper option right now than imports and an imminent government auction of edible oil reserves may also relieve demand pressures.
China's State Grain Administration announced in late September that it would release some of its temporary vegetable oil reserves via public bidding to bolster market supplies and stabilize prices.
China Grain Reserves Corp., the country's grain stockpiler, has reportedly not booked Argentine imports either, an official with a state-backed think tank told Dow Jones on Tuesday.
Officials at Argentina’s embassy in Beijing told Dow Jones that informal signals suggested a resumption of soyoil trade, though they were awaiting official confirmation from Buenos Aires.
"It all seems to indicate that the resumption is on its way," said Mariano Alvarez, an embassy media officer, citing a conversation Tuesday with Argentina's ambassador to Beijing, Cesar Mayoral.
China's Ministry of Commerce would support the resumption of soyoil imports from Argentina as long as there are no quality concerns, said Chen Rongkai, a ministry media official.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.