China Shunning U.S. Soybeans on Trade Tensions, Bunge CEO Says
Date: Thursday, May 3, 2018
The world’s biggest oilseed processor just confirmed one of the soybean market’s biggest fears: China has essentially stopped buying U.S. supplies amid the brewing trade war.
In a move that caught many in U.S. agriculture by surprise, China last month announced planned tariffs on American shipments of soybeans. As the market waited for the measure to take effect, there was some hope among traders and shippers alike that relations between the nations could ease in the meantime and the trade flow would continue. But that doesn’t seem to be the case, at least for now, according to Bunge.
Price volatility in farm goods has picked up in recent weeks as the saber-rattling between the U.S. and China intensifies. Other agricultural products caught up in the dispute include corn, pork and sorghum. Soybeans are the second-largest American crop and prices are heavily dependent on trade with the Asian nation, the world’s top importer.
In the two weeks ended April 19, China canceled a net 62,690 metric tons of U.S. soybean purchases for the marketing year that ends Aug. 31, U.S. Department of Agriculture data show. At this time of year, South American countries typically complete their harvests and become the dominant shippers for several months. Brazil’s lead on global exports is expected to widen to a record in the 2017-2018 season as it sells 73.1 million tons abroad versus 56.2 million from the U.S., the USDA estimates.
Bunge has still been able to meet Chinese demand by filling shipments with supplies from outside the U.S., Schroder said. The White Plains, New York-based company has a large presence in South America.
“I would rather say that we would prefer that free trade and no disruptions take place because it’s not good for anyone,” Schroder said. “We are, by virtue of our footprint, in a very good position to deal with” the situation, he said.
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