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China Said to Halt Imports of Argentine Soybean Oil (Update2)
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By Bloomberg News
April 11 (Bloomberg) -- China stopped approving permits to import soybean oil from Argentina, four executives familiar with the halt said, as a trade rift widens between the biggest buyer and largest supplier of the commodity.
The Ministry of Commerce’s computer system for processing permit applications isn’t functioning and the ministry didn’t say when it would be operational, said the people, who declined to be named because they’re not authorized to speak publicly.
The central government assumed full control for Argentine soybean oil imports from the provinces from April 1. The move was in response to Argentina’s anti-dumping investigations on Chinese goods ranging from steel pipes to textiles, according to a Chinese state-backed trade group.
An Argentine delegation visiting Beijing this week failed to reach agreement on the matter as China’s government said the import issues are related to oil quality, the people said. China is likely to maintain its curbs in the near term, the executives said.
The government isn’t restricting Argentine soybean oil imports and the decision to centralize import permit management is to further monitor Argentina’s oil, a press official at the commerce ministry, who asked not to be named, said in a telephone interview yesterday.
A separate official at the ministry denied the government had stopped accepting import permit applications, in an interview in Beijing today. He said to his knowledge the online system is still working and China’s general position on Argentine soy oil hasn’t changed, while declining to be identified. The Argentine embassy was closed and unable to be contacted by phone.
Cargo Canceled
The move comes as domestic rapeseed crops are about to be harvested and imports of soybeans are projected to reach a record, so the China vegetable oil market is well supplied, the executives said.
China and Argentina should be able to resolve the dispute, Cheng Guoqiang, deputy head of the State Council’s Development & Research Center, said in Beijing today at a conference organized by the China Cereals and Oils Business Net. He declined to predict when it may be resolved, adding the matter is part of wider-scale trade conflicts between the two nations.
China can’t produce enough soybean oil to meet its demand nor can it afford to draw its stockpiles too low, said Thomas Mielke, executive director of Oil World, at an interview in Beijing, where he attended the same conference as Cheng. Neither the U.S. nor Brazil, the top two soybean producers, has the capacity to crush enough oil to meet China’s demand, making it “risky” for China to continue rejecting Argentine imports, Mielke said.
This week, a state-owned company canceled one Argentine cargo, weighing about 10,000 tons, one of the executives said. Two were redirected to other countries because buyers were concerned they would be rejected on arriving in China, he said.
Two shipments are expected to arrive in China this month after they departed Argentina before the announcement on March 31, and traders are waiting to see how authorities treat those cargoes, the people said.
Traders will have to rework contracts that have already been signed with Argentine suppliers, one executive said.
Argentina is China’s biggest supplier of soybean oil and China is the Latin American nation’s biggest buyer. The government of Argentina collected $600 million in export taxes on the cooking oil sold to China, two of the people said.
--William Bi, with assistance from Li Yanping. Editors: Tom Kohn, Jim McDonald.
To contact the Bloomberg News staff on this story: William Bi in Beijing at [email protected]
Last Updated: April 11, 2010 04:52 EDT
Share Business ExchangeTwitterFacebook| Email | Print | A A A
By Bloomberg News
April 11 (Bloomberg) -- China stopped approving permits to import soybean oil from Argentina, four executives familiar with the halt said, as a trade rift widens between the biggest buyer and largest supplier of the commodity.
The Ministry of Commerce’s computer system for processing permit applications isn’t functioning and the ministry didn’t say when it would be operational, said the people, who declined to be named because they’re not authorized to speak publicly.
The central government assumed full control for Argentine soybean oil imports from the provinces from April 1. The move was in response to Argentina’s anti-dumping investigations on Chinese goods ranging from steel pipes to textiles, according to a Chinese state-backed trade group.
An Argentine delegation visiting Beijing this week failed to reach agreement on the matter as China’s government said the import issues are related to oil quality, the people said. China is likely to maintain its curbs in the near term, the executives said.
The government isn’t restricting Argentine soybean oil imports and the decision to centralize import permit management is to further monitor Argentina’s oil, a press official at the commerce ministry, who asked not to be named, said in a telephone interview yesterday.
A separate official at the ministry denied the government had stopped accepting import permit applications, in an interview in Beijing today. He said to his knowledge the online system is still working and China’s general position on Argentine soy oil hasn’t changed, while declining to be identified. The Argentine embassy was closed and unable to be contacted by phone.
Cargo Canceled
The move comes as domestic rapeseed crops are about to be harvested and imports of soybeans are projected to reach a record, so the China vegetable oil market is well supplied, the executives said.
China and Argentina should be able to resolve the dispute, Cheng Guoqiang, deputy head of the State Council’s Development & Research Center, said in Beijing today at a conference organized by the China Cereals and Oils Business Net. He declined to predict when it may be resolved, adding the matter is part of wider-scale trade conflicts between the two nations.
China can’t produce enough soybean oil to meet its demand nor can it afford to draw its stockpiles too low, said Thomas Mielke, executive director of Oil World, at an interview in Beijing, where he attended the same conference as Cheng. Neither the U.S. nor Brazil, the top two soybean producers, has the capacity to crush enough oil to meet China’s demand, making it “risky” for China to continue rejecting Argentine imports, Mielke said.
This week, a state-owned company canceled one Argentine cargo, weighing about 10,000 tons, one of the executives said. Two were redirected to other countries because buyers were concerned they would be rejected on arriving in China, he said.
Two shipments are expected to arrive in China this month after they departed Argentina before the announcement on March 31, and traders are waiting to see how authorities treat those cargoes, the people said.
Traders will have to rework contracts that have already been signed with Argentine suppliers, one executive said.
Argentina is China’s biggest supplier of soybean oil and China is the Latin American nation’s biggest buyer. The government of Argentina collected $600 million in export taxes on the cooking oil sold to China, two of the people said.
--William Bi, with assistance from Li Yanping. Editors: Tom Kohn, Jim McDonald.
To contact the Bloomberg News staff on this story: William Bi in Beijing at [email protected]
Last Updated: April 11, 2010 04:52 EDT
