China to buy millions of tonnes of U.S. soybeans during Xi visit

the world’s top soybean buyer, will purchase millions of tonnes of the oilseed from the United States during President Xi Jinping’s visit to the country next week, industry sources said.

A Chinese delegation will likely sign deals to buy “several million” tonnes of soybeans during a ceremony on Sept. 24 in the Midwestern state of Iowa, said a source that will travel with the trade group accompanying Xi.

China buys more than 60 percent of the globally-traded volume of soybeans, and the crop is routinely on the shopping list of Chinese leaders visiting the United States, the world’s second-biggest exporter. China crushes its soybean imports into soyoil for food processing and soymeal for livestock feeds.

When Xi made his first state visit to the United States as vice-president in February 2012, a Chinese delegation signed a deal to buy more than 12 million tonnes of soybeans, a record one-off purchase.

Although the deals are seen as political gestures, they could boost the U.S. soy market <0#S:>, where the front-month contract traded at 6-1/2-year lows last week.

More than 20 Chinese companies, including state-owned food processors COFCO, Sinograin and the Heilongjiang Jiusan Group, will join the delegation, sources said.

The privately-owned Sunrise Group, which used to be the largest Chinese soy buyer, is also part of the delegation.

China is likely to purchase a total of 27 million tonnes of soybeans from the United States during the 2015/16 (Oct/Sept) marketing year, down from 29.6 million tonnes in the previous year, the China National Grain and Oils Information Centre (CNGOIC), an official think-tank, said in a report on Tuesday.

CNGOIC also forecast the country’s total soy imports for 2015/16 to grow by only 1 million tonnes to 78 million tonnes over the period, because of the country’s overall economic slowdown, according to a revised estimate last week, up slightly from an earlier forecast in August.

U.S. soy exporters have faced their slowest sales in seven years for their new crop this year as huge South American supplies and a strong dollar have been crimping demand for U.S. shipments.