China soybean processors seek tariff relief amid supply squeeze

China's private soybean processors are facing a supply squeeze in the fourth quarter due to tightening inventories in Brazil and high tariffs on United States agricultural products. The industry is currently struggling with negative margins and weakening demand for feed as China's pig herd shrinks.

Industry participants are looking toward an upcoming meeting between President Xi Jinping and U.S. leadership in Washington this month, hoping for a reduction in the 10% import tariff on U.S. agricultural goods. U.S. Trade Representative Jamieson Greer indicated that both nations may make announcements regarding agriculture and non-tariff barriers during the summit, though specific details were not provided.

Experts suggest that if tariffs are not reduced, private crushers may have to rely on reserve auctions from Sinograin to maintain operations. While state-owned traders purchased approximately 11 million metric tons of U.S. soybeans following a meeting in May, private processors have largely avoided North American supplies due to the current tariff structure.