Political tensions between the U.S. and China have run high the past several months. The good news is it doesn’t appear there has been much spillover into U.S. agricultural trade. In fact, the recent sales of U.S. corn and sorghum followed up a record year of China beef exports and China has also been back in the soybean export market.
For this marketing year to date China has purchased 1.127 billion bushels of U.S. soybeans, which is up 11-percent from a year ago. That China business accounts for nearly 62-percent of the 1.82 billion bushels of U.S. soybean export commitments to date. The head of the U.S. Soybean Export Council says this is evidence the relationship between the U.S. and China on a business-to-business level is solid and is not getting caught up in the higher-level politics.
Jim Sutter, CEO, U.S. Soybean Export Council says, “China has been back as a major player. And you know, China I I’ve used the word several times I’ve heard Chinese leaders use the word ballast. And you know, the Ag trade is sort of the ballast in this very stormy relationship between China and the US and I think we’ve seen lots of storm clouds over the last few months with China and have very high level, but the ag trade situation is good.”
Trade missions have also resumed post COVID and although U.S. soybeans are still subject to tariffs, Sutter says China has been issuing import certificates. This is further evidence of their desire to buy U.S. soybeans. “The tariffs are still there, they’re still on the books, but they continue to give tariff waivers, so the importers are able to get a tariff waiver on soybeans from the United States. So no, so not paying any tariffs today,” he says.
Despite a recent relapse, demand for U.S. soy has also come from the rebuilding of China’s hog herd after African Swine Fever. And attempts to look for substitutes for soy in hogs ration have been unsuccessful. So, this leaves Sutter optimistic China will be a good customer for U.S. soy long term.
Right now soybean exports to China have slowed, which is normal this time of year as South America’s crop is harvested and comes to market and especially since Brazil is forecasted to have record supplies.
