HAMBURG (Reuters) - China is starting to buy more Argentine soybeans because of China’s trade war with the United States, and Argentina will in turn purchase more U.S. soybeans to meet its own needs, oilseeds analysts Oil World said on Tuesday.
Soybean exports from the United States to China have come to a virtual stop since July when Beijing imposed heavy tariffs on U.S. imports as part of a trade war between the two countries.
China has transferred much of its soybean purchases from the United States to Brazil, but tightening Brazilian supplies mean Chinese buying is now starting to transfer to Argentina.
"With Brazilian export supplies declining seasonally, and falling below the year-ago level in October/December 2018, China is turning to Argentina," Oil World said in its weekly report.
"In September, Argentina is expected to export approximately 100,000 tonnes of soybeans to China. We estimate that shipments to China may reach 1.8 million tonnes between September 2018 and February 2019 against none a year ago," the Hamburg-based company said.
This means China would dominate Argentina's September 2018-February 2019 soybean exports, which were expected to total 1.90 million tonnes against 1.77 million tonnes in the same year ago-period, Oil World said.
But the poor Argentine soybean crop in early 2018 and reduced domestic supplies would make it necessary for Argentine crushers to turn to the United States to cover their needs.
Argentina has already bought 850,000 tonnes of U.S. soybeans for shipment from Sept. 1.
"We expect additional soybean purchases by Argentina from the United States in the weeks ahead," Oil World said.
"We forecast that Argentina will import 1.6 million tonnes of U.S. soybeans in September 2018/February 2019 and possibly another 0.2 to 0.4 million tonnes in March 2019," it said.
(Reporting by Michael Hogan; Editing by Edmund Blair)