Argentina to benefit from China US soybean tax threat: chamber

The decision by China to implement a 25% tax on soybean exports from the US could benefit Argentina if it decides to partially substitute soybean imports with soymeal and soyoil, Patricia Bergero, deputy director of the Rosario Board of Trade (BCR), told Agricensus.

“It may seem evident that Brazil will be the most favoured in terms of market share in this soybean trade if China finally implements taxes on US exports," Bergero said.

"However, it could also happen that China decides to substitute part of its soybean exports and buy less soybean and more soy meal and soy oil. This would benefit Argentina as it is the world’s largest exporters of these two sub-products,” she added.

Bergero highlighted that China is currently demanding soybean with a higher level of protein content compared to the soybean currently being supplied by Argentina.

“In the short term, it might be sufficient to mix soybean imported from Argentina with other products but in the long term, Argentine producers may need to focus to improve the level of protein content,” she said.

“If this measure continues over time, it is likely to see a readjustment in trade flows with increasing soybean shipments to China from South American providers,” Bergero added.

In 2017, Argentina exported 6.6 million mt of soybean to China, while the South American country’s total soybean exports totalled 7.38 million mt last year.

In terms of value, Argentina’s soybean exports to China amounted to $2.41 billion in 2017, while last year’s total soybean exports reached $2.71 billion.

China announced its intention to tax US soybean in retaliation for proposed US tariffs on Chinese goods worth $60 billion announced last month. China also announced taxes on 105 other US products.