Economy

China said to permit Argentine soy oil

(Agencies)
Updated: 2010-10-12 14:39

China will allow the two largest State-owned grains and oilseeds trading companies to import soybean oil from Argentina, easing restrictions imposed in April, Bloomberg reported on Oct 12 quoting two traders with direct knowledge of the matter.

Beijing-based COFCO Ltd, China's biggest grain trader, and China Grain Reserves Corp have been cleared by the commerce ministry to import soybean oil from Argentina, said the traders, who declined to be identified as they are not permitted to speak to the media.

China halted shipments from Argentina, the largest supplier, in April because of trade disputes ranging from textiles to kitchen products. The move to ease restrictions follows an improvement in relations between the two countries, with Beijing in July agreeing to work on rail projects worth at least $12 billion in Argentina.

China and Argentina seem to have improved relations recently and the two countries want to form a more extensive trading partnership, Bloomberg reported, citing Li Qiang, managing director at Shanghai JC Intelligence Co.

China's commerce ministry told a closed-door conference of traders on Oct 9 that shipments from Argentina will be allowed to clear customs even if they fail to meet a limit on solvent residues in soybean oil, the traders said. Solvents are applied to crushed beans to extract more oil.

Seeking cargoes

COFCO and Sinograin have been inquiring about purchasing Argentine soybean cargoes at traders, the two executives said. Argentine imports are 150 yuan to 200 yuan ($30) per metric ton more expensive than local prices, the executives said.

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A call to COFCO was not immediately answered. Calls each to the commerce ministry and Sinograin, which stockpiles grains and oilseeds on behalf of the government, were also not answered. Mariano Alvarez, a spokesman at the Argentina embassy in Beijing, did not immediately return calls to his mobile phone.

China will soon lift restrictions on imports of soybean oil from Argentina as the nations seek a closer relationship, Ambassador to China Cesar Mayoral said in August.

The Asian nation bought record amount of soybeans in the first eight months of this year at 35.53 million tons, up 20 percent from a year earlier, according to customs.

Soybean oil has gained 26 percent in the past year on the Dalian Commodity Exchange and jumped 4 percent to 8,916 yuan a ton on Oct 12.