As a consequence of the Sino-U.S. trade war, Brazil is likely to ship nearly 60 million tonnes of soybeans to China this calendar year, a 9-percent increase from 2017, say USDA analysts. While the United States is effectively shut out of China because of high tariffs, “U.S. trade opportunities for markets outside of China would rise by nearly 13 million tonnes in the coming (trade) year, compared to 2016/17,” according to the monthly Oilseeds: World Markets and Trade report.
China dominates the world soybean market by buying roughly two-thirds of all the soybeans sold internationally. That creates a sort of push-pull effect on U.S. export prospects, says USDA. As China gobbles Brazilian beans, it increases the opportunity for U.S. sales to other countries that need soybeans. At the same time, there is “an 8 million-tonne decline in potential U.S. and other exporter trade to China for the same period.”
Overall, the USDA expects a slight decline in annual U.S. soybean exports while China holds steady on its imports.
But that might not be the case. The Chinese Agriculture Ministry says imports for the 2018/19 marketing year will drop 11 percent from 2017/18, said Caixin Global. China would import less because there are few high-volume soybean suppliers available when Brazil’s stockpile runs low. The country could import other oilseeds to fill its protein needs. It also has expectations of a larger domestic soybean crop. About 85 percent of the soybeans used in China are imported.