Trade Wars: China to import less soy first time since 2004

Cornelia Mascio
Luglio 16, 2018

The trade conflict between Beijing and Washington is already boosting grain and oilseed exports from the Black Sea region, where major sellers including Russia, Ukraine and Kazakhstan are looking to sell more corn, wheat and soybean to the huge Chinese market.

Rabobank said last week it reckoned China will have to buy 15 million tonnes of US beans with the new tariff this year because there aren't enough alternative sources of beans from other major exporters, like Brazil and Argentina.

China buys two-thirds of the world's soybean exports and, historically, more than half of USA soybean shipments, worth $12.25 billion past year. USA farmers will export 250 million fewer soybean bushels than predicted earlier this year.

"Exports jumped a little more than 30,000 tonnes in market year 2017-18 to almost 80,000 tonnes in large part because of increased demand from India", the report said.

USDA expects soybean consumption to reach 43,000 tonnes for market year 2018-19. Prices for soybeans for delivery in November held steady on Thursday.

The purchases could temporarily spare USA farmers from some of the pain of Chinese tariffs.

Farmers have been able to manage low prices because of unusually high soybean yields.

President Trump has vowed to protect farmers from unfair Chinese retaliation, though the administration has declined to spell out the assistance it might provide.

China's national soybean stocks as of Tuesday were at 8.52 million tonnes, almost a month's worth of consumption, and the highest on record since at least 2010.

The ministry's Chinese Agricultural Supply and Demand Estimates (CASDE) report said the new tariffs on US shipments introduced would inflate prices of the oilseed.

China Grain Reserves Corp, the nation's largest and most wide-ranging grain storage and transportation company since 2013, said China has sufficient materials to produce edible oil and the company will increase its annual production capacity for edible oil from the current level of 6.5 million tons, as well as add more storage facilities nationwide.

As of Thursday, the price of a bushel of soybeans fell to $8.42, which is the lowest price seen since October of 2007.

With South American soybeans selling at a premium because of Chinese demand, importers in other countries have bought USA soybeans at comparative bargain prices in recent weeks.

According to Hood, in 2017 China bought more than half of the soybean crops harvested in the U.S. Arkansas was responsible for 3.5 million acres of that harvest.

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