American farmers are facing a challenging period amid this marketing season since China has halted soybean imports from the US, which has deprived American farmers of potential sales worth billions of dollars. At the same time, South American countries such as Brazil and Argentina have made space in the market to meet China’s demand.
Notably, China purchased around 7.4 million metric tons of soybeans for October, mainly South American soybeans. Not only this, but the country has also booked 1 million tons of soybeans for November. Additionally, China had booked 12-13 million tons of US soybeans from September to November.
Reason behind the sudden halt of Soybean imports
China usually imports soybeans from the US between September and January, but this time, there has been no purchase for the new crop year. US soybeans are cheaper than Brazilian soybeans, but importers have halted purchasing US soybeans due to the 23% tariff from China.
What do the experts say?
Experts say that if China stays away from US soybeans by mid-November, there is a risk of losing sales of 14-16 million tons. The US Department of Agriculture (USDA) has already expressed the possibility of reducing the export estimate in its upcoming report. On the other hand, the oil industry in China is suffering losses due to the high cost of soybeans from Brazil. Crush margins in major processing hubs like Rizhao have recently gone negative. At present, there is no major impact in India, but if American soybean enters the Chinese market again, then India and other countries may face competition in soybean and soy oil prices.