SINGAPORE: A jump in prices for Brazilian soybeans is putting off buyers in China, two traders said, even as the rise was driven by expected demand from the world's No.2 economy as its trade war with Washington intensifies.
Prices for Brazilian soybeans have climbed to $400 a tonne, including cost and freight (C&F) to China, up from $380 last week before the latest round of escalation in the Sino-U.S. trade conflict, the traders said.
The rise was stoked by expectations Chinese buyers would boost soy purchases from places such as Brazil due to the trade tensions, with Beijing saying it would stop taking U.S. agricultural products in response to fresh tariffs on Chinese goods announced last week.
"Ever since the U.S. president announced a 10% tariff on Chinese products, Brazilian prices have risen," said a trader on the sidelines of an industry conference in Singapore.
"Most Chinese importers are staying away from the market."
Both traders, who have direct knowledge of Chinese buying, declined to be identified as they were not authorised to speak to media.
Soybean prices in Sorriso, at the heart of Brazil's soy country in the state of Mato Grosso, closed at 62.31 reais ($15.67) per bag on Tuesday, 0.81% above the previous day and the highest level since June 18, according to price research centre Cepea/Esalq.
Meanwhile, falling demand for animal feed ingredient soymeal as Africa swine fever spreads through many of China's pig herds will likely dampen the nation's appetite for soybeans over the longer term. The beans are often used to make meal.
"Demand for soymeal is just hand-to-mouth as no one is sure what is going to happen next," said the second trader, from a company that owns soybean processing plants in China.
"(Also) no one has any idea on trade war, how and when it is going to end."
China, the world's biggest pork consumer, has reported more than 140 outbreaks of African swine fever since its first case in August last year.
China's soybean imports are expected to drop to 85 million tonnes in 2018/19, from 94.1 million tonnes shipped in 2017/18, according to U.S. Department of Agriculture data.
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