The Removal of Chinese Tariffs on Alternative Meal Implies Inessential of US Soybeans?
On Monday, December 24, 2018, Chinese Finance Ministry has announced that it will remove import/export tariffs on certain category including alternative feed meal.
As the global economy and markets show signs of slowdown, and the trade deal between the US and China still has yet to find a closure, Beijing has announced of its planning to remove import and export tariffs in 2019 on a range of goods, including import taxes on alternative meals used in animal feed, starting from January 1, 2019.
This is to secure supplies of raw materials amid trade tension while boosting outbound cargoes. While China has resumed some purchases of U.S. soybeans, the tariffs on the oilseed from America remain in place, and the removal of tariffs on alternative meals could help improve the reliability of supply of animal feed meal in China for the rainy season, analysts said. Moreover, it has been just the state-owned firms that have done the buying of soybeans.
China originally imports soybeans to crush into meal for animal feed and cooking oil, but after the imposition of 25% import tariff on the US Soybean, China has stopped the trade and turned to rely on alternative meal instead of soybean.
Could the announcement of tax removal from Beijing imply that the US soybean is not something as essential as it used to be?
