China has signed an agreement with Argentina to supply soybean meal. Thus, the second largest economy in the world has opened up another feed source for its meat industry. Because of the trade war with the US, the country had been looking for new soybean suppliers.
The agricultural industry of the South American country expects annual exports of five million tons for $ 1.6 billion to China, reports the newspaper "La Nación".
Due to reciprocal punitive tariffs, soybean exports from the US to China had already halved last year. Beijing is now looking for new suppliers to feed more than 500 million pigs and cattle in China.
Import for China cheaper
The trade dispute with the United States may have helped to complete 20 years of negotiations between China and Argentina.
Soy is mainly used as pet food. In recent years, millions of Chinese have risen to the middle class and can now afford meat. Even the Chinese are growing less and less soya, because the import is much cheaper. Since 2000, the acreage has decreased by about 25 percent.
Argentina is the world's largest exporter of soybean meal with expected exports of 26 million tonnes this year. China processes more than 70 million tons of soy flour per year as pork and cattle feed. So far, the bulk of soybean imports come from Brazil.