Some American soybean cargo is rerouted to Bangladesh and Pakistan
By Diego Flammini
Staff Writer
Farms.com
America’s largest soybean customer is rejecting crop shipments as a trade war escalates.
China reduced U.S. soybean imports by about 366,000 metric tons, USDA export data for the week ending June 28 says.
Ships carrying American soybeans are travelling to other ports as a result of China’s actions.
About 60,000 tons of U.S. soybeans originally headed to China will arrive in Bangladesh, and the same amount will also go to Pakistan.
Market disruptions with China could be disastrous for U.S. soybean producers.
China’s 25 percent tariff on American soybeans could result in a 65 percent decrease in exports to the Asian country, a Purdue University study says. And total U.S. soybean exports could drop by 37 percent.
Soybean prices are also impacted by the trade war.
About a month ago, growers could have earned about US$9.75 per bushel of soybeans. Today, some commodity markets opened with September soybean futures around US$8.78/bu.
The longer the trade war continues, the tougher it may be for U.S. soybeans to re-enter the Chinese market.
The Chinese government is encouraging the country’s farmers to increase their soybean acreages to offset any losses from international markets.
Chinese farmers currently plant about 21 million acres of soybeans, and the government plans to add 1.6 million more acres for production. It is also offering growers larger subsidies, from US$190 to $320 per acre, compared to the current US$150/ac.
“Our farmers really hope that China will import less soybeans so that domestic soybean production and soybean-related businesses will flourish,” Yang Guiyun, an ag sales manager in China’s largest soybean producing area, told NBC News Saturday.
American soybean growers worry global trading partners will not want their crops if the trade war continues for an extended period.
“The soybean industry is a loser if we become a residual, rather than primary, supplier of soybeans to China,” the Iowa Soybean Association said in a statement Friday. “Iowa is disproportionately impacted because of the tremendous volume of soybeans produced here and the need to move our product to international customers.”
Farms.com has reached out to soybean producers for comment on how the trade war may impact their operations.
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