first US government forecast incorporating the agricultural fallout from
its trade war with China has come to a firm conclusion on soyabeans:
China will import less, American farmers will lose business and Brazil
will be a beneficiary.
Beijing last week increased duties on imported US soyabeans, cotton and
other products by 25 percentage points in response to tariffs on Chinese
goods imposed by Donald Trump’s administration. Soyabeans are the US’s
largest agricultural export to China and are grown in rural states that
mainly voted for Mr Trump.
As the top soyabean importer, accounting for more than 60 per cent of
global trade, China’s move has rattled markets. Soyabean futures have
slumped to levels at which many US farmers will lose money without
The US Department of Agriculture, in monthly supply and demand estimates
published on Thursday, cut its forecast for China’s soyabean imports
from 103million to 95million tonnes in the coming marketing year,
reduced its outlook for US soyabean exports by nearly 11 per cent from
62.3million to 55.5million tonnes and raised its estimate of Brazilian
exports from 73million to 75million tonnes, a record high.
(US Department of
The new Chinese tariffs raised duties on US soyabeans from 13 per cent
to 38 per cent, according to the US Soybean Export Council. The levy
began redirecting trade flows even before taking effect on July 6.
Marcel Smits, chief financial officer of Cargill, the world’s largest
agricultural trader, said in an interview that China has been cancelling
purchases of US soyabeans and non-Chinese customers have been attracted
to the US.