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USDA Soybeans Report Highlights Falling Exports to Mainland China

The November 2018 “Oilseeds” report from the U.S. Department of Agriculture’s Foreign Agricultural Service reflects significantly decreased mainland Chinese purchases of U.S. soybeans. The report indicates that the small quantities that were shipped after the imposition by Beijing of retaliatory duties have either been diverted to other markets (Vietnam, Singapore and South Korea) or are currently languishing off the coast of mainland China waiting to be discharged.

According to FAS, accumulated soybean exports to mainland China for the new marketing year were at 407,000 tonnes, which is 96 percent below or 9.9 million tonnes less compared to last year. While shipments to the rest of the world were 71 percent above last year’s amount (2.5 million tonnes more), they have not fully offset the decline in mainland Chinese demand.

A 5 November New York Times article described the impact on U.S. farmers of the sharp decline in soybean exports to mainland China. As their production of soybeans increased, farmers in the North Dakota county that leads the United States in soybean exports spent millions of dollars on larger grain elevators, on the 110-car trains that carry the soybeans west to the Pacific Coast, and on bigger terminals at the ports. Farmers often turned in their grain drills, which they had previously used to plant wheat, for machines to plant soybeans—but now they are concerned that these purchases were wasted and lack certainty as to how to plant for the future.

A new organisation called “Tariffs Hurt the Heartland” has been publicising this issue as well, including during the lead-up to the U.S. mid-term elections. However, it is not believed that U.S. trade policy played a decisive role in-and-of-itself in the mid-term election results since voters look at a variety of issues in deciding how to vote in an election.

Content provided by Picture: HKTDC Research
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