China said it intends to grant exemption from reciprocal import duties levied on certain US goods, and specifically, on 696 items. Beijing said it intends to fulfill its obligations in a trade deal with the United States.
The announcement came on Tuesday after a trade agreement between the two countries entered into force on February 14, and this is the third round of tariff benefits China has offered for US goods. But traders were waiting for clear signs that China would increase US soybean purchases before raising prices.
A USDA report on Tuesday morning showed that soybeans export inspections totaled 992,294 tons for the week ending February 13th. This included 203,165 tons destined for China, compared with 404,420 tons last year.
In the USA, every citizen on average spends only 7% of his own annual income on food. For comparison, in third world countries this figure reaches 80%.
“Large purchases of soybeans in the United States and other grains in China have not occurred since the deal was signed, but market expectations remain such that Chinese purchases are likely to begin in the near future,” brokerage company Allendale said in a note to customers.
Traders ignored the report of the National Association of Oilseed Processors, which showed that its members crushed a record 176.94 million bushels in January (a unit of 35.2 liters).
Massive expectations for a crop from South America have also increased pressure on the cost of soybeans.
The Brazilian soybean crop is expected to reach a record 125.6 million tons in 2019-2020, AgRural consulting company said Monday.
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