China is buying more U.S. soybeans, as both countries try to reach an initial agreement on trade.
Between September and November this year, Chinese imports of American soybeans increased 13 times from the same period last year, according to Xiaoping Zhang, Greater China Regional Director for the U.S. Soybean Export Council. That's based on analysis of Chinese and U.S. data.
U.S. soybean exports to China dropped off sharply in the second half of last year after Beijing retaliated to U.S. tariffs with its own duties.
As a result, all Chinese purchases of U.S. soybeans this year occurred through specific arrangements, outside normal trade channels that would otherwise subject the imports to retaliatory tariffs of about 30%, Zhang said in a phone interview Monday.
That trend was made public on Friday, when China's Ministry of Finance said on its website, according to CNBC's translation of the Chinese text, that Chinese companies "independently import" certain amounts of U.S. commodities and that the government is working on waiving tariffs for some U.S. soybeans, pork and other commodities, based on company applications.
In the past, Beijing has tended to describe its U.S. agricultural purchases in vague terms, such as "according to Chinese market needs and market-based principles."
The world's two largest economies have been embroiled in a trade conflict for more than a year, with each country applying tariffs to billions of dollars' worth of goods from the other.
While both sides remain far apart on issues such as the role of the state in China's economy, the two delegations decided in October to work toward a "phase-one" agreement. Reports and official Commerce Ministry statements indicate that reaching such a deal involves agreeing on greater Chinese purchases of U.S. agricultural products, and a rollback of retaliatory tariffs.
Chinese exports to the U.S. dropped 23% in November — the lowest single-month growth rate on record, after adjusting for the lunar year holiday — but imports rose 2.7%, the first increase since August 2018, according to China customs data accessed via the Wind Financial database.
Ting Lu, chief China economist at Nomura, said in a note Monday that he attributed the increase in imports to a low comparison base, more agricultural imports from the U.S. amid the trade negotiations, and potential front-loading of imports from the U.S. given China's plans to retaliate to American duties set to take effect Dec. 15.
China's overall soybean imports rose 53.9% in November to 8.278 million tons, their highest since August, according to China customs data accessed via the Wind Financial database.