China has resumed new purchases of U.S. soybeans as physical exports continue, according to USDA.

USDA announced Friday a new export sale of 204,000 metric tons of U.S. soybeans for delivery to China in the 2019-20 marketing year, but more of those announcements are expected in the coming days and weeks.

U.S. Soybean Export Council CEO Jim Sutter tells Agri-Pulse that, while details are still unclear on the exact moves the Chinese government is making, it appears the country has begun to allow some of its importers to again avoid tariffs on U.S. soybeans.

“What we think is happening … is that, as a goodwill gesture, they have given an exemption to the import duties on soybeans for some period of time, for some limited quantity of soybeans,” Sutter said.

This is not the first time this has happened. China agreed to tariff exemptions for four private companies and at least one state-owned firm to buy U.S. soybeans in July, ahead of high-level trade talks in Shanghai. Those importers were expected to buy between 2 and 3 million tons, but it’s unclear how much business actually occurred because China retracted the exemptions in early August after President Donald Trump vowed on Aug. 1 to hit China with new tariffs.

But still, many of those tariff-free sales went through and the result is the physical exports that are now shipping to China.

“It’s been running 400,000 to 600,000 tons per week in physical shipments from the U.S. to … China,” Sutter said.

Earlier this week USDA reported exports of 341,100 metric tons of U.S. soybeans to China between Sept. 1 through Sept. 5.

The new purchases come the same day that China, through state-owned media outlets, promised it would lift tariffs on US soybeans and pork.

On Sept. 1, China raised the punitive tariff rate on U.S. soybeans from 25% to 30%. The punitive tariff rate on U.S. pork went up by 10% to 60%.

Even with the recent steady stream of physical exports to China, U.S. sales are way below normal because of the trade war and the tariffs that have been in place for more than a year.

The 2018-19 marketing year just ended, and U.S. soybean exports totaled about 13 million metric tons, Sutter said. That’s down from 27.5 million tons in the previous year and 36 million tons the year before that.

But the Chinese action is being viewed as another positive development ahead of scheduled trade talks between the two countries early next month.

Sutter said the resumption of sales to China is good news, adding: “It’s a much better sign that there are goodwill gestures coming from both sides … but this has been going on for well over a year now, so who knows.”

Sen. Deb Fischer, R-Neb., released a statement Friday, saying, “It’s good to see recent purchases of U.S. agricultural goods and this morning’s announcement that China will not be adding additional tariffs for U.S. imports of soybeans and pork. This is positive news for Nebraska’s farmers and producers.”

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