China has been gobbling up the world’s soybeans at breakneck speed over the past decade. But as the trade spat with the US escalates, its imports of the oilseed are set to decline for the first time in 15 years.
China will bring in 95 million metric tons of soybeans in the 2018-2019 season, the US Department of Agriculture (USDA) said on Thursday in its monthly World Supply and Demand Estimates report. That’s down from the USDA’s June forecast for 103 million tons and would mean a drop of 2.1% from the prior crop year.
Soybean futures for November delivery fell as much as 1.3% to $8.385 (about R110) a bushel in Chicago on Friday.
China slapped duties on US soybean shipments earlier this month in response to Donald Trump’s tariffs.
As a result, the Asian country will pay more for the oilseed, slowing its use of soybean meal – a product used to feed hogs. The Asian country could turn to using more of its stockpiles, as the USDA forecasts an 18% decline for China’s inventories in 2019.
China’s soybean imports dropped 10% to 8.7 million tons in June from a month earlier, the General Administration of Customs said on Friday.
The USDA’s forecast for lower purchases is in line with a May prediction from the China National Grain and Oils Information Center, which estimated 2018-19 imports falling to 95 million tons.
China has been avoiding US soybeans and shifting its purchases to other countries. The changing trade flows and lower consumption will probably drive global soybean inventories up to a record and boost US stockpiles as American shipments drop.
Farmers in Brazil, the world’s biggest exporter, may boost production in response as China’s purchases from the South American country rise, the USDA said.