China soybean buyers will cope if America spat hits imports

Updated 2018-03-05 13:42:03

Animal feed makers in China, the world's top soybean buyer, will find ways to cope if a deepening trade dispute with the U.S. hurts imports of U.S. oilseed, said Liu Yonghao, the chairman of China's top feed maker New Hope Group, on Saturday.

U.S. President Donald Trump announced plans on Friday to impose hefty tariffs on imported steel and aluminum, stirring concerns of retaliation from major trade partners such as China, the world's top agricultural market.

Last month, the Chinese government fired a salvo across its top trading partner's bow when it launched an investigation into U.S. imports of sorghum, a grain used in livestock feed, and the fiery Chinese liquor baijiu after Washington slapped import penalties on washing machines and solar panels.

Business executives say the Chinese government could now target more critical agricultural commodities, such as soybeans, the U.S.' biggest agricultural export by value, worth more than billion last year.

Liu said he hopes the world's top two economies avoid a trade war, but "we will be able to find ways" to cope if soybeans are drawn into the spat.

Liu is the first senior executive from a major Chinese agricultural company to speak publicly about the impact of a trade war on the country's vast farming and livestock sector.

Analysts have warned that curbing U.S. bean imports or imposing tariffs on them would likely increase prices of the oilseed, which is used to make animal feed, hurting China's crushers, feed makers and pig farmers.

The country doesn't grow enough soy to feed its vast livestock industry.

"We will produce feed as usual. We will produce pigs as usual. And Chinese people will eat meat as usual," Liu said at a company briefing.

Earlier in the briefing, he signaled that Chinese buyers would likely find alternative supplies to the U.S.

"The market is huge. There are other countries other than the U.S.," he said.

He didn't comment any further, but farmers, traders and analysts have said that Brazil, the world's largest exporter of agricultural goods including soybeans, beef and sugar, could benefit if the spat escalates.

The South American country has already grabbed a bigger share of the lucrative Chinese market over the past year from the U.S.

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