Data released on Wednesday has shown a surge in US soybean exports to China.
Shipments of soybeans, which were formerly blocked by customs, have now been cleared for entry. Chinese imports of US soybeans totaled zero last year, but are now already up to 2.56 million metric tons. Of this total, about 1.15 million tons were imported by China last October as the country started issuing waivers for some importers of certain US goods. However, soybean imports shortly plummeted again as China applied new tariffs on US products. Then in December, the two countries agreed to a trade war truce.
Now that the US and China have reached the first phase of a new trade agreement, China has been buying US agricultural products in large volumes. As the fourth quarter autumn harvest comes in, the US is expected to dominate the soybean market for the next few months. Amid the trade war, China sought to diversify the sources of their soybean imports, with Brazil accounting for 5.07 millions metric tons of soybean imports in China in November of 2018. One year later, that figure is down to 3.86 million tons.
Chinese demand for soybeans is constant, as they are crushed and used to make cooking oil and support China’s huge livestock sector. However, the recent wave of African Swine Fever cases has hit China’s pork sector and reduced demand for soybeans. The Chinese pork sector is currently still recovering, so demand for soybeans is expected to rise in the coming months.