Chinese companies will most likely cancel all shipments of soybeans left for this year, as new US import tariff will become effective on Friday, Bloomberg reports.

China is the largest buyer of soybeans in the world. It new tariffs are applied, then it will be unprofitable to buy US beans, and companies will have to cancel deliveries or resell them.

Shipments aimed for state reserve are free of tariffs and will go through. China was planning to buy 97 million tons of soybeans this marketing year.

Since April Chinese buyers increased volumes from Brazil and created large inventories that are at record level this year.

Analytics predict that Latin America shipments will not be enough to load local plants, and companies will have to buy commodity even with 25% tariff.

Premium for Brazilian soy beans with August delivery was 70% higher than for US beans.