China signed a letter of intent with exporters in Argentina to buy about US$900 million of soybeans, corn and vegetable oil, the latest indication that the Asian nation will avoid sourcing from the US during President Donald Trump’s trade war.
Chinese officials were in Buenos Aires on Wednesday to sign the non-binding agreement, according to two people familiar with the matter who couldn’t be named discussing private talks. Argentina newspaper Clarín first reported the news.
A delegation from China Council for the promotion of International Trade visited Argentina on May 7, and met with officials in charge of international trade and agriculture markets from the South American country, according to a statement published on the website of the government trade body on Thursday.
Chinese delegates also had discussions with business representatives in Argentina, on topics including promoting bilateral economic development and safeguarding free trade. The two sides signed a memorandum of understanding, the statement said, without providing further details.
China is already Argentina’s biggest buyer of unprocessed soybeans. It buys some Argentine soy oil and it also opened its doors last year to the country’s corn.
Still, Argentina is a minor supplier of crops to China, and hasn’t exported any soybean to the world’s largest market since January this year. Corn shipments remain zero, according to Chinese customs data.
While not the first of its kind, such a large upfront commitment by China for Argentine crops is unusual. And its arrival amid an escalating trade war is a sign that China is prepared to keep tariffs on the US in place — in retaliation against Trump’s duties — and instead source crops from South America.
The Buenos Aires press office for Chinese trading house Cofco International Ltd said in a statement Thursday that it reached an understanding with Sinograin, the state company in charge of managing China’s strategic food reserves, “to extend the supply of agriculture commodities from Argentina to China and explore further long-term cooperation.”
Separately, China’s Fufeng Group Ltd is interested in building a corn-processing plant, the Argentine Rural Society said in a post on X last month.
by Jonathan Gilbert & Manuela Tobias, Bloomberg
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