China’s State Importer Buys U.S. Soy As Tariff Threat Looms

China's state-run grain trader Sinograin purchased nearly 500,000 metric tons (MT) of U.S. soybeans this week for shipment in March and April, even as trade tensions between the U.S. and China persist, Karl Plume and Mei Mei Chu reported for Reuters.

Sinograin is tasked with managing China's strategic grain reserves. I Photo: Sinograin

Sinograin, tasked with managing China's strategic grain reserves, paid a premium for U.S. soybeans over cheaper Brazilian alternatives. This preference is due to U.S. soybeans being less prone to spoilage, a critical factor for long-term storage.

Analysts noted that Sinograin bought U.S. beans at around 90 cents per bushel over Chicago Board of Trade March futures and 80 cents over May futures on a free-on-board (FOB) basis—approximately 80 cents to $1 above Brazilian FOB prices for the same period.

The purchases come amid fears of renewed tariffs under U.S. President-elect Donald Trump, which could disrupt trade flows and erode the value of U.S. soybeans.

China booked an additional 750,000 tons of U.S. soybeans last week for shipment from January to March. Despite these purchases, soy prices remain under pressure due to high U.S. stockpiles and a record harvest expected in Brazil.