Exclusive: Argentine bid to win access to China soymeal market stalled - chamber

Reuters  |  BUENOS AIRES 

By Hugh Bronstein

Luis Zubizarreta, of Argentina's ACSOJA soy industry chamber that represents farmers, exporters and seed companies, said the country was keen to clinch an export deal that would secure access to the world's biggest hog- and pork-producing country.

needs enormous amounts of animal feed and has historically protected its soy crushing industry by importing raw soybeans to be processed locally.

However, a trade war between and the - its second largest supplier of soybeans - has limited the flow of U.S. oilseeds to Chinese plants, encouraging them to look elsewhere.

Mauricio Macri's government hopes to announce the soymeal-to-China agreement at the meeting in at the end of this month, but that deadline looks increasingly ambitious.

"The government of is pushing to make this happen but it depends on a decision by the to do something it has never done before: import soymeal from Argentina," Zubizarreta said in an interview.

"It's a complicated road to change a policy that has been in place for such a long time," he added.

has long been the world's top exporter of soymeal but the crushing plants that dot the banks of the River, its main grains thoroughfare, are working at only about half their capacity due to fallout from the U.S.-China trade war.

U.S. and his Chinese counterpart are due to meet at the summit in for highly anticipated talks on the trade dispute.

has slapped a 25 percent tariff on U.S. soybean imports, effectively halting soybean shipments to China. The resulting glut of cheap soy in the has lowered input costs for U.S. meal crushing factories, making them more profitable and rendering crushers in uncompetitive.

The in Argentina was already reeling from a drought on the Pampas farm belt that dried up soybean supplies this year.

The opening of China to meal would be a boon to the South American country, whose located between the Pampas and the deep-water ports of the make it the world's most efficient place to crush soy.

"The government is confident that the negotiations will advance, but things are going slowly," Zubizarreta said, adding that there had been no progress in registering plants with Chinese authorities.

"We are pushing to advance in all the steps, including the inspection and registration of Argentine soy crushing plants by the Chinese authorities. The ball is in their court."

Argentina's was in earlier this month, trying to settle the deal.

There was no immediate comment from the A for the Argentine agriculture secretariat declined to comment on the talks.

Zubizarreta said that, given economies of scale advantages enjoyed by the massive crushing plants on the River, could include some "reasonable limits" on the amount of Argentine meal allowed into China.

"It is very important for Argentina to sell value-added products," Zubizarreta said. "China has historically protected its soy crushing industry but they need to protect the of their country."

(Additional reporting by in Chicago; Editing by and Marguerita Choy)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, November 23 2018. 11:38 IST