China to Buy Millions of Tons of U.S. Soybean During President’s Visit
A Chinese delegation is expected to sign deals to buy ‘several million’ tons of U.S. soybeans at a ceremony in Iowa on September 24 during President Xi’s upcoming state visit, according to a source that will be traveling with the group accompanying the Chinese leader. More than 20 Chinese companies, including some of the country’s largest, such as COFCO, Sinograin, the Heilongjiang Jiusan Group, and China’s once-largest soy buyer, the privately held Sunrise Group, will be included in the delegation.
This would not be the first time China has signed such deals. During Xi’s first state visit to the U.S., as China’s vice-president in 2012, a Chinese delegation agreed to buy more than 12 million tons of U.S. soybeans in a record-breaking single deal.
Even though deals such as these are veiled political gestures, nevertheless, they could help boost the U.S. soy sector as prices are at a six and a half year low, and U.S. soy sales face their slowest sales in seven years due to a strong dollar and a market glut from South American supplies.
Because of the country’s economic slowdown, China’s total soy imports are expected to grow by only 1 million tons in 2015/16, and the country is expected to buy a total of 27 million tons of U.S. soybeans over 2015/16 marketing year – down from 29.6 million tons the previous year according to a report issued by the China National Grain and Oils Information Center. (CNGOIC).