Argentina’s ministry of agriculture, livestock and fisheries said that the approvals were given within the framework of the agreement recently reached between both countries.
The plants are Bunge Argentina, LDC Argentina, Cargill, Molinos Río de la Plata, Renova, T6 and COFCO International Argentina, which were inspected by Chinese officials in an audit visit at the end of August.
Not a quick fix
However, a China based trader told Reuters that Argentina based exporters of soybean meal must also register their plants with the Chinese agriculture ministry, and the procedures involved are quite complex. That process could take up to five months.
Argentina is the biggest supplier of soybean meal (SBM) and soybean oil globally. It is expected to export a total of 26 million tons of SBM worldwide in 2019, as per data released by the country’s agriculture ministry last month.
However, idle capacity at soybean crushing plans in Argentina has increased to more than 50%, according to an article on Bloomberg. Profit margins have been hit because of rising bean prices and a change last year in Argentina’s tax system that makes exporting raw beans more competitive.
China, prior to the agreement signed off earlier this month, had refused to import soybean meal from Argentina in order to protect its domestic crushing industry. However, the tariff tiff with the US has prompted Beijing to see new trading partners. In the past year, China has been increasingly buying soybeans from Brazil.
Soybean meal is a key ingredient in animal feed, largely used in pork and poultry production in China. However, the outbreak of African Swine Fever (ASF) in China has tempered pig feed demand in that market.