Posted on 07/25/2018 7:16:54 PM PDT by Red Steel
Non-Chinese buyers cash on American supplies to feed demand in their own countries, analysts say
Who’s winning the US-China trade war? When it comes to soybeans, the answer is Brazil. The South American nation is capitalising on the strife caused by US President Donald Trump’s trade war to profit from both China and America in soybean trade.
China has been the biggest buyer of US soybean in recent years, but as imports have become caught up in Beijing and Washington’s tit-for-tat tariffs, Chinese purchasers are now looking to to Brazil to make up the shortfall.
As a result, US soybean prices have fallen by 20 per cent since April to their lowest price in nearly a decade, while the Brazilian crop is being sold at a premium, according to industry watchers.
At the same time, Brazil and Argentina, another major soybean grower, have snapped up some of the cheap US supplies for their domestic markets, according to Grant Kimberley from the Iowa Soybean Association.
“There have been purchases from Brazil and Argentina to back fill their own domestic industries,” he said.
It’s not just Brazil that’s buying the surplus American soybeans, however; US sellers have also reported unusually high sales in non-traditional markets across Europe, the Middle East and Southeast Asia.
“In the end, the beans are going to move someplace, it’s just question of at what price,” he said. “It’s like a big game of musical chairs, but it’s not something you would draw up in an economics class as a model of efficiency, that’s for sure.” China’s soybean imports forecast to fall as tariffs hit and buyers switch to other animal feed
China, which imports 60 per cent of the soybeans traded worldwide, bought 32.9 million tonnes from the US last year, accounting for 34 per cent of total purchases.
That total is forecast to drop by 6.8 million tonnes for the 2018/19 crop year, according to the US Department of Agriculture.
In contrast, Brazil’s exports to China were on the rise, increasing to 8.2 million tonnes in June from 6.6 million tonnes at the same time last year, said Arlan Suderman, chief commodities economist for New York-based commodity trading and risk management services provider INTL FCStone.
Suderman said Brazilian soybean was about 20 per cent more expensive than the US product and Chinese processors would have to decide whether to pass the extra cost on to consumers.
“They will have to either absorb the increased cost, pass them along to the livestock producers utilising the soy meal and food companies utilising the soy oil, be subsidised by the government, or some combination. In the end, the Chinese crush and livestock industries are paying a steep price,” he said. Why China can’t count on Brazil to fill the soybean gap in its trade battle with the US
US farmers are also worried about the upcoming harvest. Chinese buyers have accounted for just 17 per cent of all advanced purchases of the autumn US soybean crop, down from an average of 60 per cent over the past decade, according to Reuters.
“With each day, we’re that much closer to the combines rolling, and the longer this goes, the more anxiety will intensify,” Iowa Soybean Association spokesman Aaron Putze said.
“Although the clock is ticking, the prevailing sense among farmers is that this is going to get worked out. But [the administration of US President Donald Trump] is a different kind of administration, that is not conventional, and so people are biding their time.” How the China-US trade row might pave the way for the soybean Silk Road
US soybean exporters say while they did not expect a resolution in the near future, both US sellers and their Chinese buyers were eager to get back to business.
“Our Chinese partners have told us they are hopeful that this gets resolved in a reasonable period of time, and that they want to resume normal trading, but their hands are tied too,” Kimberley said.
“This is a government-to-government, and a political issue, that is out of everyone’s hands.”
Bingo. The DNC-Media speak as if the US is in a David Ricardo macro economic trade equilibrium and that Trump is destroying it. Nothing could be further from the truth. Our midwest towns and cities have been decimated by a decades-long trade war that we have been losing and it’s time to stop. The fancy economists on TV never mention the social cost about trade and those societal costs dwarf the product tariffs, and it’s important to note.
We should have done a better job. Ghost towns, food stamps and opioid addictions do not mean you have free trade. It means you have sucker-trade.
I’m 51 years old. I will sacrifice my sperm count for my cholesterol count.
An American official involved in the process stated flatly that Brazil did not have the output capacity to provide the beans now provided by the USA.
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Its the dishonest and unscrupulous manufactu4rers that beg to differ because soy is cheap and fulfills the UN agenda to depopulate the world.
Most people haven’t the intelligence to read the lables to see that soy or canola are present in the concoction that is killing them.
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Yes, soy beans are a blight on the human race. Well fermented their dire consequences are quelled. It distresses me to see so many soy bean fields when decent produce could be grown in them.
Yes, soy beans are a blight on the human race. Well fermented their dire consequences are quelled. It distresses me to see so many soy bean fields when decent produce could be grown in them.
Cone Mills recently shut down. The last true selvedge denim producer in the USA. When Levi’s Jeans were the “Shrink to fit” tough thick jeans I used to buy in the early 1980’s they were made from Cone Mills denim.
Now Levis are crap. Quality control is garbage. The fabric is garbage. The fits have all changed wildly. 501’s look nothing like they used to.
I expected that Cone Mills would have their machinery torn down and sold to either China or Japan (Japan has a big fetish for artisan Denim). Now that Trump is waving his magic wand, I still hold out hope that someone in the USA will buy Cone Mills and restart it with classic pattern jeans in authentic denim.
That comment is so ridiculously nonsensical as to not even require a response. But again, it has nothing to do with the issue of the world wide distribution of Soybeans. Like it or not, the world consumes megatons of Soybeans every year, this country produces more than half of it, and we need to have it sold in a market environment where the producers playing field is level. A final comment: If, as you believe, Soybeans are a UN "plot" to kill us all off, why is it that the countries where Soybeans are a major component of the local diet, are flourishing as in China, Japan, and all of Southeast Asia and India for that matter?
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The comment that is ridiculous is your own.
It simply acknowledges your total lack of understanding of just about everything of significance.
Soy as beans is not a major component anywhere but the US where people willingly consume their own death.
In asia, soy is used only in the fermented state.
As for plots, the UN does not plot, it is a plot.
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