The big narrative currently doing the rounds on soybean markets pertains to the fallout from the potential trade war between the United States and China. This potential United States-triggered trade war could lead to China’s retaliation against United States soybean exports.
China, for sure has already been swinging toward Brazilian soybeans. Will it get worse? Well, the United States administration appears to be readying more measures, this time directed right at China. So far China has been vague about any retaliation, but American farmers are jittery.
Also worth noting is that China is the world’s leading importer of soybeans, commanding a share of 64 percent of global soybean imports of 151 million tonnes in 2017/18.
In the past five years, the United States has been one of the key suppliers of soybeans to China accounting for a nearly 40% share of that market, according to data from Trade Map. Brazil and Argentina were also amongst the key suppliers, hence the talk in the market points to a possible increase in South America’s share of the Chinese market at the expense of the United States over the coming years.
Let us hope that the United States is only playing brinkmanship and that there will be no blood on the floor for United States soybean farmers.
*Many thanks to Michael McDougall (ED&F Man) for sharing US farmers’ views.