China has approved soymeal exports from seven soybean crushing plants in Argentina, the South American country’s agriculture ministry said.
The announcement comes less than two weeks after Argentina, the top soymeal supplier, announced that China, the world’s biggest soymeal consumer, would allow imports from the country for the first time following decades of talks.
The plants approved for export include those owned by Bunge Ltd’s Bunge Argentina, LDC Argentina, Cargill Inc, Molinos Río de la Plata, Renova, T6 and COFCO International Argentina, the ministry statement said.
Chinese inspectors audited the facilities in late August, according to the statement.
Traders in China, however, are not expecting Argentinian soymeal to enter the domestic market soon, due to complex approval procedures for shipments, and as a severe outbreak of African swine fever that has reduced demand for the livestock feed.
“For exports of Argentina soymeal, the overseas plants must also register with the Chinese agriculture ministry, with the assistance of Chinese firms. The procedures are quite complex,” said a China-based trader.
“Sales prices (of Argentina soymeal) here would also be below the purchase prices. The trade is not doable for now,” the trader said.
Demand for the animal meal has been checked by the year-long African swine fever epidemic that has ravaged China’s pig herd and slashed almost 40% of the national output.
“We will trade some when can. But it’s a long-term prospect,” said another trader with an international trading house. “We haven’t looked into it yet. Demand is still very bad.”
The traders declined to be named as they were not authorized to talk to the media.
Argentina has tried for years to break into the Chinese market, however, China had resisted imports to protect its domestic crushing industry.
The U.S.-China trade war strengthened Argentina’s hand, prompting China to sign the Sept. 10 deal paving the way for exports. China has approved livestock feed imports from various countries to secure supplies amid the trade dispute.
China’s state-owned construction company CCCC is also preparing a bid to dredge Argentina’s Parana River, a key conduit for the country’s grains, as China seeks to lock in supplies by investing in commodity transport hubs around the globe.