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Mon Dec 3, 2018, 05:02 PM

Spoils of Trade War: Argentina Loads Up On Cheap U.S. Soybean

By Hugh Bronstein and Karl Plume BUENOS AIRES/CHICAGO, Nov 30 (Reuters) –

A ship named the Torrent is nearing the end of a 5,000-mile trip carrying soybeans from the U.S. Great Lakes to Argentina – a journey that only makes economic sense because of the U.S.-China trade war.

The ship is scheduled to dock in the Rosario grains hub on Dec. 4, days after the leaders of the world’s two largest economies, U.S. President Donald Trump and Chinese counterpart Xi Jinping, hold high-stakes trade talks in Buenos Aires.

They will meet on the sidelines of a Group of 20 nations summit and are expected to discuss how to roll back tit-for-tat tariffs – covering goods worth hundreds of billions of dollars – that have skewed global trade flows.

The Torrent’s 20,000-tonne soybean cargo is one such distortion, and just one of 14 ships the Argentine soy crusher Vicentin has lined up to import U.S. soybeans, according to port data reviewed by Reuters. The previously unreported shipments are among the first significant Argentine purchases from the United States in two decades, according to Vicentin’s broker and port data, as the nation’s government and industry moves to capitalize on the tumult of the U.S.-China conflict.

Argentina – one of the world’s top soybean exporters, and the top exporter of processed meal and oil – usually has no reason to import beans. But this year, the South American nation has raced to the top of the list of U.S. soybean importers because the prices of U.S. beans have fallen by 15 percent since late May, when China first threatened tariffs on them.

“One of the consequences of the trade war is that U.S. beans have to find a new home,” said Thomas Hinrichsen, president of Buenos Aires-based brokerage J.J. Hinrichsen SA, which cut the deals for Vicentin. “You are in the money to ship cheaper U.S. beans into efficient crushing plants in Argentina.”

Beyond price, Argentina needs U.S. beans to feed its massive soy-crushing industry after a punishing drought. What is left of the nation’s own crops are going to feed pigs in China – where buyers are paying a premium for South American soybeans to fill the gap left by virtually halted imports from the United States.

“The combination of the drought in Argentina and the soy glut in the United States caused by the trade conflict has directed U.S. soybeans toward Argentina,” said Guillermo Wade, manager of Argentina’s Port and Maritime Activities Chamber. “They are being used to keep our crushers working while freeing Argentine soybeans to go to China.”

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Reply Spoils of Trade War: Argentina Loads Up On Cheap U.S. Soybean (Original post)
Submariner Dec 2018 OP
JustABozoOnThisBus Dec 2018 #1
Wellstone ruled Dec 2018 #3
Roland99 Dec 2018 #2

Response to Submariner (Original post)

Mon Dec 3, 2018, 05:32 PM

1. Can Argentina turn the ship around and sell the soybeans to China?

Would that avoid the tariffs?

Would anyone know?

Also, that's a nice photo of a freighter running empty. It's riding too high to be full of soybeans.

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Response to JustABozoOnThisBus (Reply #1)

Mon Dec 3, 2018, 06:25 PM

3. You just nailed the truth.

Argentina will just be a Broker for China on US Beans. Next will be Corn.

If you understand how this works,once the Ship leaves Territorial Waters,the Cargo Manifest can be adjusted and gee whiz,it shows up at a different port assigned to different Receiver. Learned that while working a Lumber Desk for a major lumber broker.

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Response to Submariner (Original post)

Mon Dec 3, 2018, 05:35 PM

2. Essentially selling soy for two bits. Does that make the ship the...

BitTorrent ??

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