Shipping Number Of The Week: 82% Drop In US Soya Bean Exports To China.

31 October, 19

US soya bean exports to China are 82.8% lower in the first seven weeks of the 2019/2020 marketing season compared to the same period of the 2017/2018 marketing year, before the trade war started affecting this trade, according to BIMCO’s market analysis team.

So far, only 1.1 million tonnes of US soya beans have been exported to China, higher than the 0.2 million tonnes shipped in the first seven weeks of the 2018/2019 marketing year, but considerably below the 6.4 million tonnes at the start of the 2017/2018 marketing year.

Sustained low exports are a fact despite talk in recent weeks of a phase 1 deal between the US and China, which, according to the US administration, will involve China importing up to USD 50 billion worth of US agricultural products. A return of Chinese buyers to the US soya bean market has also been announced in the past, without this change materialising.

Will this time be different?

While China has recently increased the amount of soya beans which can be imported before 30% tariffs are applied, from 20m tonnes to 30m tonnes, appearing to show a willingness to increase imports of US soya beans, they have also made clear they will only make any purchases in line with market competitiveness, and if they have a demand for the beans, according to www.agricensus.com.

The total soya bean demand in China has fallen after the massive culling of pigs which has taken place in response to an outbreak of African swine flu. The Chinese pig herd is reportedly 41.1% lower in September 2019 compared to September 2018.

Furthermore, the price of US soya beans rose on the rumours that Chinese buyers would be returning to the market, making Brazilian soya beans cheaper. This has led to Chinese recently buying several loads of soya beans from Brazil, during its offseason, rather than the US, which it usually would at this time of the year.

The facts therefore remain that this US marketing season is unlikely to bring a breakthrough in the US-China soya bean trade. Despite all the talk and the higher volumes the Chinese can import without paying tariffs, China will only buy the amount of soya bean it needs and will buy them from the cheapest source.

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