China opens soymeal market to Argentina, world's No. 1 exporter
The pact will be signed by Argentine and Chinese officials in Buenos Aires on Wednesday, Argentina’s agriculture ministry said in a statement. Last month Chinese officials inspected Argentine soymeal factories in the run-up to signing the pact.
Argentina had tried for years to break into the Chinese market, the biggest consumer of the meal it uses to feed its massive hog herd. China, with its own crushing industry to protect, had steadfastly resisted.
The U.S.-China trade war, however, strengthened Argentina’s hand, prompting China to expand its soymeal import options, market sources say.
The meal manufactured in the giant crushing plants that dot the banks of Argentina’s Parana River, clustered around the country’s main grains hub of Rosario, is exported mostly to Southeast Asia, Europe and Northern Africa. China imports only small amounts of soymeal currently, none of it from Argentina.
“This is an historic agreement,” Gustavo Idigoras, president of Argentina’s CIARA-CEC chamber of grains exporting companies told Reuters. He said all authorizations needed for the start of exports were expected to be done in October. “Immediate shipments are not expected at the moment,” he said.
Argentina, the top global exporter of processed soy, expects to export a total of 26 million tonnes of soymeal this year globally, and 8.5 million tonnes of raw beans.
“It is excellent and timely news. Argentina needs to add more value to its exports to China and the world,” said Luis Zubizarreta, president of Argentina’s ACSOJA soy industry organization that represents farmers, exporters and seed firms.
The pact provided a welcome respite from the bad news that has hammered Argentina’s economy in recent months. The country is in recession and inflation is expected at 55% this year.
Business-friendly President Mauricio Macri faces an uphill fight for a second term in the Oct. 27 election.
Reporting by Hugh Bronstein and Maximilian Heath, Editing by Rosalba O'Brien, Grant McCool and David Gregorio