US soybean growers denounce additional tariffs on Chinese goods

US soybean growers denounce additional tariffs on Chinese goods

China on Thursday cut its forecast for soybean imports for the 2018/19 crop year, warning that higher prices due to trade conflict with the United States would curb demand as farmers switch to alternative ingredients for their animal feed. Beijing retaliated with in-kind tariffs on American products, including soybeans.

China imports about 100 million metric tons of soybeans each year, and the US contributes about 35% of that total, according to USDA.

Farmers in Brazil, the world's biggest exporter, may boost production in response as China's purchases from the South American country rise, the USDA said.

Chinese buyers have so far this year accounted for just 17 percent of all advanced purchases of the fall US soybean harvest - down from an average of 60 percent over the past decade, the analysis found. "It is likely that [livestock] feed rations will be altered", said the companion Oilseeds: World Markets and Trade report.

Mexico has booked almost 1 million tonnes in advanced purchases of US soybeans - four times more than last year - while Pakistan's 273,000 tonnes in forward purchases are up 44 percent from a year earlier, the USDA data shows.

Soybean prices remained in the doldrums on Thursday.

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

Former President Obama in ancestral home Kenya to launch sister’s project
Former US President Barack Obama takes a group photo with rangers at Serengeti National Park in Tanzania. Auma Obama attended his 2009 inauguration and was a big part of her brother's 2015 visit to Kenya.

Farmers have been able to manage low prices because of unusually high soybean yields, but projections suggest those are returning to average. There is a projected loss of roughly $500 million.

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. By contrast, the stockpile was a scant 92 million bushels when the 2014 harvest began.

Trump has threatened to impose tariffs on almost all Chinese imports to the US.

Even though customs data show that China imported 32.85 million tons of soybeans from the USA in 2017, experts said soybean oil and soybean meal are replaceable, thanks to the world's sufficient supplies.

No. 3 exporter Argentina has also bought US soy to supplement its own drought-stricken crop.

"Despite losing market share in China, soybean exports are supported in other markets as lower USA prices increase demand and market share", said the USDA. "Everyone is bringing in large volume of Brazilian beans and building up more stocks in advance on worries of the trade spat", said Tian Hao, senior analyst with First Futures.

Related Articles