Chinese buyers ink second bulk soymeal deal with Argentina, sources say

By Ella Cao and Naveen Thukral

BEIJING/SINGAPORE, July 24 (Reuters) - A Chinese buyer has signed a deal this week to import 30,000 metric tons of Argentine soymeal, as animal feed producers ramp up purchases to take advantage of softer prices in the South American market, three trade sources told Reuters on Thursday.

This marks the second such deal since Beijing approved Argentine soymeal imports in 2019, following the initial purchase by Chinese buyers in June.

"It is attractive to import soymeal from Argentina," said one Singapore-based trader at an international trading company. "Feed makers can make some profit by importing Argentinian soymeal."

Argentine soymeal is currently priced lower than domestically produced soymeal from local crushers, sources said.

The interest reflects the efforts by China's feed industry to diversify supply sources and reduce the risk of disruptions amid the ongoing Sino-U.S. trade tensions.

The latest cargo for September shipment was sold at $365 per metric ton, including freight, with a protein content of 46.5%, the sources added.

The deal comes as China faces a soybean meal supply glut due to an influx of South American soybeans, with crushers urging buyers to speed up pickups to clear space, two traders and two analysts told Reuters.

"It's a case of panic buying. Despite the current oversupply in the soymeal market, some buyers are still concerned about potential supply tightness down the line, driven by ongoing uncertainty surrounding U.S.-China trade negotiations," said Johnny Xiang, founder of Beijing-based AgRadar Consulting.

Soybean imports into China hit an all-time high in May and reached a record level for the month of June.

Imports are expected to remain elevated in the third quarter, while fourth-quarter shipments will depend on the progress of China-U.S. trade talks.

China, the world's largest consumer of the protein-rich feed ingredient, typically produces it by crushing soybeans imported primarily from Brazil and the United States. Argentina, meanwhile, is the world's top exporter of soymeal and soy oil.