Imports could resume if talks go well: experts

The trade in soybeans between China and the US might return to normal if the trade talks between the two countries go well, experts said on Tuesday. 

Soybeans are dried under the sun in Chiping county, East China's Shandong Province in October. (Photo: VCG)

The comments came shortly after China and the US announced a 90-day ceasefire in their trade dispute to allow time for more negotiations. 

Geng Shuang, spokesperson for China's Foreign Ministry, repatriated at a press conference on Tuesday that the two countries will speed up negotiations and try to reach a mutually beneficial agreement. 

US President Donald Trump said in a twitter post on Monday that US farmers will benefit significantly from the trade deal with China. He also noted that China plans to start purchasing agricultural products (from the US) "immediately." 

"If the trade talks turn out well, China could remove all the extra tariffs it has imposed on US soybeans this year, and soybean imports from the US might return to the level before the trade dispute erupted," Jiao Shanwei, editor-in-chief of grain portal cngrain.com, told the Global Times on Tuesday.   

According to Jiao, US companies usually supply their soybeans in the fourth quarter of a year and the first quarter of the next year. 

"This overlaps the time for the trade talks. So if agreements are reached quickly, the soybean imports will immediately rebound at the beginning of next year," Jiao said. 

In response to the trade dispute the US initiated against China earlier this year, China decided to levy a 25 percent tariff increase on a number of US agricultural products including soybeans and pork in June. 

This prompted Chinese companies to turn to alternative sources such as Brazil, Russia and Argentina. China's soybean imports from those countries surged amid the trade war.    

Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultancy, told the Global Times on Tuesday that US companies have cut their soybean prices significantly as a result of the trade dispute.

"Agricultural companies are sensitive to tariffs as their profit margin is very low. If the trade talks go well, I think Chinese traders will find a new balancing point in soybean imports. They won't completely give up markets like Argentina, but they will certainly purchase more US soybeans," Ma stressed. 

According to a report by China Business News in November, less than 500,000 tons of soybeans have been exported from the US to China since the end of July, while nearly 18 million tons of US soybeans were shipped to China between August and November last year. 

Easy to strike a deal

Observers believed that it should be "relatively easy" for China and the US to reach an agreement on agricultural product trade during this round of trade talks. 

"China had already planned to increase imports of agricultural products from the US, but this plan was interrupted by the bilateral trade dispute," said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics. 

Besides, there is also significant demand in China for US agricultural products such as soybeans, pork and beef, Tu told the Global Times on Tuesday. 

But he cautioned that it will still be very hard for China and the US to scrap all the tariffs they have recently imposed on each other since the trade dispute started. 

Even after agreements are reached during the 90-day truce, the US may still postpone some tariff cuts as bargaining chips for future negotiations, analysts said.