Japan's Marubeni stops some new soybean sales to China amid trade dispute

By Yuka Obayashi and Hallie Gu TOKYO (Reuters) - Marubeni Corp said on Friday that its U.S.-based unit, Columbia Grain Trading Inc, has stopped all new soybean sales to China because falling sales volumes to the country due to the trade war with the United States have cut earnings. The move highlights the growing impact of the trade dispute between the United States and China even after Beijing agreed to a potential removal of tariffs on some soybean imports. Columbia Grain Trading stopped new sales from July 24, a spokesman at Marubeni, one of Japan's biggest trading houses, told Reuters

Reuters July 27, 2019 03:06:20 IST
Japan's Marubeni stops some new soybean sales to China amid trade dispute

Japans Marubeni stops some new soybean sales to China amid trade dispute

By Yuka Obayashi and Hallie Gu

TOKYO (Reuters) - Marubeni Corp <8002.T> said on Friday that its U.S.-based unit, Columbia Grain Trading Inc, has stopped all new soybean sales to China because falling sales volumes to the country due to the trade war with the United States have cut earnings.

The move highlights the growing impact of the trade dispute between the United States and China even after Beijing agreed to a potential removal of tariffs on some soybean imports.

Columbia Grain Trading stopped new sales from July 24, a spokesman at Marubeni, one of Japan's biggest trading houses, told Reuters.

The decision does not impact other Marubeni units such as Gavilon involved in trading grains, including soybeans to China, and their business continues as normal, the spokesman said.

There are no plans to shut down Columbia Grain Trading, the spokesman said.

The suspension was likely aimed at reducing Marubeni's risk exposure at a complicated time for the grains trading business, two traders familiar with Marubeni's operations said.

Most of the sales to China by New York-based Columbia Grain Trading include a freight commitment, a riskier business than that of Marubeni's Portland, Oregon-based Columbia Grain International unit, most of whose sales transfer ownership to the buyer as soon as the grain is loaded for export, the traders said.

China was the top buyer of U.S. soybeans until Beijing slapped a 25% tariff on shipments in response to U.S. tariffs on a range of Chinese products.

That all but halted U.S. soybean imports, dealing a blow to American farmers and traders of the oilseed across the sector.

But as talks have restarted between the U.S. and China on trying to resolve their issues, Beijing indicated it would allow exemptions to the soybean tariffs for some cargoes arriving before the end of the year.

China's demand for soybeans crushed into livestock feed has decreased dramatically in recent months as African swine fever swept across the country, resulting in the death or culling of millions of pigs.

China brought in 16.6 million tonnes of soybeans from the United States in 2018, about half of the 32.9 million tonnes purchased the year before, as the tariffs curbed buying.

Marubeni executives have said slumping grain prices and shrinking trading volumes weighed on the company's U.S. grain business because of the trade war.

(Reporting by Yuka Obayashi in TOKYO, Hallie Gu in BEIJING and Karl Plume in CHICAGO; Writing by Aaron Sheldrick; Editing by Kenneth Maxwell and Christian Schmollinger)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.