China’s Ministry of Commerce said this week that purchases of U.S. agricultural products by Chinese companies have been “suspended.”
With Chinese buying on hold, U.S. exporters will instead focus on shipping orders made earlier this year when the two sides appeared headed for a deal, a list that includes more than 4 million tonnes of soybeans and nearly 103,500 tonnes of pork.
Tensions escalated after Washington branded Beijing a currency manipulator and threatened to impose 10% tariffs on $300 billion in Chinese imports, starting on Sept. 1.
“Chinese private buyers are not going to be making any U.S. purchases with a government ban in place,” said Dan Basse, president of AgResource Co. “These are the last sales we are going to see unless there’s some thawing or some movement in the U.S.-China trade negotiations.”
China bought 60,000 tonnes of wheat, 50,000 tonnes of sorghum and 1,350 tonnes of pork in the week ended Aug. 1, weekly U.S. Department of Agriculture (USDA) data showed. The data also confirmed a new purchase of about 71,200 tonnes of soybeans.
The sales, a fraction of what China would normally buy from the United States, occurred as top officials met in Shanghai for talks aimed at restarting trade talks to end a year-long trade war.
The miniscule sales are a sign of the rising intensity of a trade war that has riled markets, redrawn global supply chains and heaped economic pain on some of the world’s largest companies, including grain merchants Archer Daniels Midland Co (ADM.N) and Cargill Inc [CARG.UL].
Chinese tariffs on U.S. soybeans have slashed exports of the most valuable U.S. crop and prompted the Trump administration to compensate farmers for two years with as much as $28 billion.
The USDA report confirmed that export shipments of U.S. agricultural goods have continued despite the rising tensions.
More than 8,500 tonnes of pork and 516,000 tonnes of soybeans were loaded and shipped to China last week, USDA data showed.
Three bulk cargo vessels are waiting to be loaded with soybeans at Pacific Northwest ports and two more are en route to be loaded, a total haul estimated at around 325,000 tonnes, according to private shipping data seen by Reuters.