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Soybeans

China's Soybean Boycott: A Blow to American Farmers

Strategic Insights

— 2 min read

China's decision to stop buying soybeans from America in May has left a significant dent in the country's agricultural exports. The US Agricultural Department's latest exports summary shows that the sale of soybeans to China, the single largest American export to China in terms of value, worth $12.6 billion last year, has been completely absent since May. This is largely due to retaliatory tariffs placed on US soybeans, making them unattractive for buyers in China.

This development is particularly concerning as the fall harvest gets underway, with 9 percent of planted beans already harvested as of last week. The country that bought 52 percent of all American soybean exports last year is now completely absent, with other countries like Egypt, Taiwan, and Bangladesh taking up the slack. However, total soybean exports are down 23 percent this year.

The consequences of this boycott are already being felt by American farmers, with soybean prices trading at around $10 a bushel, down from $13 at the start of the year. The real worry is what is to come, as typically, more than half of American soybean exports are sold between October and December.

Key Takeaways:

  • China stopped buying soybeans from the US in May, due to retaliatory tariffs.
  • The US Agricultural Department's latest exports summary shows that the sale of soybeans to China is completely absent since May.
  • China was the single largest American export to China in terms of value, worth $12.6 billion last year.
  • Total soybean exports are down 23 percent this year.
  • Other countries like Egypt, Taiwan, and Bangladesh are buying soybeans from the US, but not enough to make up for the loss of Chinese buyers.
  • Soybean prices are subdued, trading at around $10 a bushel, down from $13 at the start of the year.
  • American farmers are worried about the consequences of the soybean boycott, which could lead to a shortage of storage space for grains this fall.
  • The Trump administration has noticed the harm caused by the trade dispute with China and is considering relief plans for crop farmers.
  • Senator Chuck Grassley and other politicians from big farming states are highlighting the harm to farmers from the trade dispute with China.
  • The government is developing more international markets for US crops through trade deals.

Statistics:

  • 52 percent of all American soybean exports went to China last year.
  • $12.6 billion: value of soybeans exported to China in 2022.
  • 9 percent of planted soybeans had been harvested as of last week.
  • 23 percent: total soybean exports are down this year.
  • $10 a bushel: soybean prices are trading at, down from $13 at the start of the year.
  • 51 percent fewer: American soybeans bought by China through July compared to the same period last year.

Sources:

  • The New York Times
  • Reuters
  • Fox Business Network
  • USDA Agricultural Department's latest exports summary

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