It is reported that the harvest season has arrived, but the biggest customer has been “driven away” by the Trump administration. Faced with soybeans that might end up unsold, farmers in the major agricultural state of North Dakota are at a loss. Traders and analysts say that the traditional peak season for U.S. soybean sales is now more than half over. Due to the stalled Sino-U.S. trade negotiations causing export blockages, and South American competitors seizing the opportunity to fill the market gap, American farmers are missing out on billions of dollars in soybean sales to China.
Analysis suggests that China had already expanded its soybean reserves before Trump took office, and unlike the U.S., which faces complex political pressures, China is very adept at fighting a protracted war. Furthermore, the agricultural subsidies promised in the U.S. bill cannot promptly alleviate the current difficulties faced by farmers.
Soybeans are one of the most important agricultural products in the United States, holding a core position in U.S. agricultural exports. Of the over 4 billion bushels (one U.S. soybean bushel is approximately 27.216 kilograms) of soybeans grown by American farmers annually, nearly a quarter are exported to China. Last year, China imported nearly $13 billion worth of soybeans from the U.S., compared to about $2 billion twenty years ago.
Previously, U.S. media noted that Chinese companies are increasingly turning to Brazil to purchase soybeans and are increasing investments in the infrastructure of Brazil’s agricultural heartland. Over the past decade, China has invested heavily in Brazilian warehouses, railways, ports, and other infrastructure to bring more Brazilian agricultural products onto Chinese ships. Last year, Brazil supplied 70% of China’s soybean imports, a figure that is double what it was 15 years ago.
Reuters reported that the traditional peak season for U.S. soybean sales is now more than half over. Due to the stalled Sino-U.S. trade negotiations causing export blockages, and South American competitors seizing the opportunity to fill the market gap, American farmers are missing out on billions of dollars in soybean sales to China.
Two traders based in Asia revealed that Chinese importers have booked approximately 7.4 million tons of soybeans, mainly from South America, for October shipment, covering 95% of China’s estimated soybean demand for October. They have also booked 1 million tons for November shipment, accounting for about 15% of the estimated imports for that month.
“From the current situation, we believe that until the end of this year, the soybean supply in the Chinese market will still be dominated by South American soybeans.”
Reuters pointed out that the prolonged absence of Chinese buyers from the U.S. soybean market is expected to further suppress the benchmark price of Chicago soybean futures, which is currently hovering near a five-year low.
Traders stated that for soybeans shipped in September-October, U.S. soybean prices are 80 to 90 cents per bushel lower than Brazilian soybeans, but China’s trade countermeasures have increased importers’ procurement costs by $2 per bushel.
Although other countries have been purchasing U.S. soybeans, Dan Basse, president of AgResource Company in Chicago, estimates that if China does not enter the U.S. soybean market by mid-November, the total loss of U.S. soybean sales to China could be as high as 14 to 16 million tons.
Last month, Chinese Ambassador to the United States Xie Feng clearly stated at the Sino-U.S. Soybean Industry Partnership Breakfast in Washington that China and the U.S., as the world’s most important agricultural producers and consumers, can perfectly complement each other’s strengths. Sino-U.S. agricultural exchanges and cooperation have not only enriched the “shopping baskets” of consumers in both countries but also filled the “money bags” of American farmers. They have provided many “golden ideas” for the transformation and upgrading of agriculture in both countries and have paved a “new path” for ensuring global food security.
He pointed out that agriculture should not be politicized, and farmers should not pay the price for a trade war. Prohibiting or restricting Chinese citizens and companies from purchasing farmland is purely using national security as a pretext for political manipulation, holding Sino-U.S. agricultural cooperation hostage for selfish gains.
Xie Feng emphasized the need to implement the important consensus reached by the two heads of state, leverage the role of the Sino-U.S. economic and trade negotiation mechanisms, enhance consensus, reduce misunderstandings, strengthen cooperation, share the dividends of development, and return to the track of win-win cooperation. He called on industry associations and enterprises of both countries to be diligent “farmers,” not only to “remove pests” by saying no to the politicization and securitization of economic and trade issues but also to “breed seeds” by taking pioneering actions and promoting win-win cooperation, allowing Sino-U.S. agricultural cooperation to flourish and grow healthily.
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