Focus: China Allowed to Import Soybean Meal from Argentina for the First time, but it Brings Limited Influence on Soybean Meal Supply-Demand in the Domestic

On September 11th, China and Argentina signed agreement that China allowed to import soybean meal from Argentina.
 
Argentina is the world’s biggest exporter of soybean processed products. Soybean meal exports in 2019 were expected to be 26 million MT, and the exports of material soybean were 8.5 million MT. China is the world’s biggest soybean meal consumer, whose consumption is upward of 70 million MT/year, mainly for domestic crushing. Along with the zigzagging of China-U.S. trade frictions, China is speeding up the diversification of sources of soybean and soybean meal.    
 
However, allowing the imports of soybean meal from Argentina won’t bring obvious influence on soybean meal supply-demand in the domestic. First, the transportation time from Argentina to China is relatively long, and it takes two months to delivery soybean meal from Argentina to Chinese ports, which bring influence on the indexes such as soybean meal moisture and mildew and further lower the quality. Second, according to inspection and quarantine requirements on feed imports from the General Administration of Quality Supervision, it takes certain time for Argentina to apply to China for the qualification of imports and to gain the registration. Third, Argentina soybean meal prices are relatively high. For example, soybean meal imports prices (duty-paying) from Argentina during November and December would be around RMB 2,900/MT, and import profits showed the “upside-down” situation.        
 
The opening of soybean meal imports from Argentina brings influence on market expectations and sentiment. Only domestic soybean meal prices increase greatly because of periodic imbalance between supply and demand, soybean meal imports from Argentina will be as a supplement. So it brings limited influence on soybean meal market in the domestic.