SINGAPORE (Reuters) - China’s purchases of U.S. soybeans beyond 10 million tonnes that Washington says Beijing has committed to buy could be limited as a freshly-harvested Brazilian crop hits the market, a leading U.S.-based agriculture broker said on Thursday.
Appetite for soy from Brazil could dampen Chinese demand for old-crop soybeans from the United States, said Jeffrey McPike, global marketing manager at McDonald Pelz, referring to U.S. beans harvested last year.
“Given the market logistics in China and the size of the Brazilian crop, sales of U.S. old-crop beyond the second tranche of 10 million tonnes, which Beijing has apparently committed to, looks unlikely,” McPike told Reuters on the sidelines of a grains conference in Singapore.
China committed to buy an additional 10 million tonnes of U.S. soybeans in a meeting on Friday, U.S. Agriculture Secretary Sonny Perdue said on Twitter, as the two nations try to thrash out a deal to end a festering trade war.
U.S. soybean prices inched up on Thursday, but gains were muted as traders worried that the eagerly awaited trade deal could remain elusive.
China, the world’s top importer of soybeans, resumed buying some U.S. cargoes in December, after U.S. President Donald Trump and his Chinese counterpart Xi Jinping struck a temporary truce in the trade conflict, but sales are still lagging.
As of last Thursday, only 7.4 million tonnes of the last U.S. soybean harvest had been sold to China, well below the 26 million in purchases at the same time last year, according to U.S. government data.
Pelz also said that outbreaks of African swine fever in China could dampen demand for soybeans used to make animal feed.
The country has already reported more than 100 cases of the incurable disease since it was first detected in the country in early August.
Pelz also noted that African swine fever had emerged in Vietnam, a country that is one of the fastest-growing consumers of feed grain in the world.
The disease this week hit two more provinces in the Southeast Asian nation, after it was first detected in three separate farms in two other provinces earlier this month.
Reporting by Naveen Thukral; Editing by Joseph Radford