China will import record volumes of U.S. oil and is likely to ship more U.S. soy after Beijing signaled to state-run refiners and grains purchasers they should buy more to help ease tensions between the two top economies, trade sources said on Wednesday.
China pledged at the weekend to increase imports from its top trading partner to avert a trade war that could damage the global economy. Energy and commodities were high on Washington’s list of products for sale.
The United States is also seeking better access for imports of genetically modified crops into China under the deal.
China is the world’s top importer of both oil and soy, and already buys significant volumes of both from the United States. It is unclear how much more Chinese importers will buy from the United States than they would have otherwise, but any additional shipments would contribute to cutting the trade surplus, as demanded by Trump.
China’s state grain stockpiler Sinograin returned this week to the U.S. soybean market for the first time since early April, two sources said.
Soybeans are America’s top agricultural export to China, worth $12 billion last year, and the absence of Chinese buyers from the market had left U.S. farmers wondering if their biggest buyers was going to want their next harvest.
Sinograin enquired about prices for U.S. soybeans this week, traders said, which market participants interpreted as a sign that government curbs on buying American goods had been lifted
“Sinograin is in the market today asking U.S. suppliers to make offers for shipment of old-crop as well as new-crop beans for shipment August onwards,” said a source who works at a private soybean crushing company in China.
“It is a clear message to even private companies that it is OK now to import U.S. beans.”
Two other sources briefed on the matter said Chinese state grain trader Cofco would be permitted to buy U.S. soybeans again, ending restrictions imposed by Beijing as trade tensions rose. The sources declined to be named as they are not authorized to speak to the media.