Economy

Argentine soy oil imports to be increased

By Niu Shuping and Nicolas Misculin (China Daily)
Updated: 2011-05-14 10:02

The move may indicate a thaw in relations after 2010 trade dispute

BEIJING/BUENOS AIRES, Argentina - China will buy 500,000 tons of Argentine soy oil, said Argentina's Foreign Minister and China's Commerce Minister on Thursday. The move indicates the thawing of a trade dispute last year, which reduced Chinese imports of the product.

A Chinese trade delegation visited Buenos Aires after Beijing imposed a de facto ban on imports of soy oil from Argentina for six months last year.

Related readings:  Soy oil imports reinstated  China said to permit Argentine soy oil

The dispute was resolved in October but purchases remained limited. China imported 120,000 tons of Argentine soy oil in the first quarter of 2011.

"There's a decision by China to sign purchasing orders of soy oil for 500,000 tons," Foreign Minister Hector Timerman said at a news conference, flanked by the Chinese Commerce Minister Chen Deming and Argentina's Agriculture Minister Julian Dominguez.

The Chinese trade delegation included three of the country's largest soy oil importers, Chen said.

"It will be a deal that will come in the short term ... China will continue to buy Argentine soy oil," he said.

"The quality and safety of Argentine soy oil is improving a lot, which means Chinese importers are showing an interest in buying this product."

A statement by Argentina's Agriculture Ministry released after the meeting said China would import 600,000 tons of Argentine soy oil. However, neither an agriculture ministry spokesman nor an official at the ministry could confirm the import volume.

At the news conference, Chen also announced investments worth $14 billion by Chinese companies in Argentina.

China, the world's largest buyer of soy oil, halted shipments from Argentina, the top global exporter, in late March 2010. The move came after the South American country imposed anti-dumping measures on some Chinese manufactured goods.

But Argentine trade restrictions, especially anti-dumping measures, "have decreased a great deal" after a visit by President Cristina Fernandez to China last year, Chen said.

"Our bilateral trade is in a period of great freedom," he said.

China's imports of the oil fell 43.9 percent to 1.34 million tons in 2010 because of the import ban, according to official customs data.

China is struggling to balance supply and demand of several major import commodities, because the government is reluctant to let local prices rise for fear of fueling inflation.

However, in recent weeks officials have trumpeted two victories in their efforts to keep supplies flowing, saying China had imported enough sugar to ensure 2011 supply and revealed a 1 million tonne purchase of corn from the United States.

Argentina has failed to keep its share of the Chinese market, prompting concern among exporters in Buenos Aires.

While China's total soy oil imports more than doubled from the first quarter of 2010 to 300,000 tons in the first quarter of this year, the volume from Argentina was unchanged, allowing the US to become the top supplier with 138,000 tons in the quarter.

Reuters