Concerns raised over long-term effect of tariffs on US soybean exports
CONCERNS have been raised about both the immediate and long-term impact on US exports, including important agricultural commodities such as soybeans, stemming from the trade war between the China and United States
CONCERNS have been raised about both the immediate and long-term impact on US exports, including important agricultural commodities such as soybeans, stemming from the trade war between the China and United States.
Terry Branstad, the US ambassador to China, told The Wall Street Journal that not only hasn't a date been finalised for a meeting between President Trump and China President Xi Jinping, but preparations for such a meeting are not yet under way.
However, Larry Kudlow, director of President Trump's National Economic Council, told CNBC that while there is 'nothing in cement ?there is a lot of talk about a meeting' between the two leaders at Mar-a-lago in late March or early April.
Speaking earlier at TPM19, the Journal of Commerce''s annual conference on the transpacific container shipping trade, Mike Steenhoek, executive director of the Soy Transportation Coalition, said there has been a dramatic drop in soybean exports to China in the current marketing year, which began September 1 and continues through August 31.
In the prior marketing year that ended August 31, 2018, there had been a surge of soybean exports 'because people saw the writing on the wall'. But the situation has changed sharply since last summer.
China normally imports about 35 million tonnes of soybeans, he said, about 10 per cent of which moves in containers and the remainder in bulk ships. He said the US has only shipped about 10 million tonnes to China in the current marketing year.
Although the marketing year is only half over, the poor start bodes poorly for the entire year since 80 per cent of US soy exports occur between the months of September and February. He said that's because the spigot for US soybean exports turns off in the US around this time of year when exports from South America take off. The harvest and planting times in the Southern Hemisphere, he noted, are the inverse of those in North America.
Mr Steenhoek said the American Soybean Association has had an office in China since 1982, a farsighted move by an industry that realised that once the Chinese had the financial wherewithal to improve their diets with increasing amount of poultry and pork, there would be strong demand for feed ingredients like soybeans.
Exports ramped up and infrastructure was built to serve the Chinese market, but Mr Steenhoek said 'now all of sudden that reputation we built up and all this infrastructure ... is being called into question.
'Even if President Trump and President Xi have the ultimate 'Kumbaya' moment, will this marketing opportunity snap back like a rubber band? I would say probably not. What we have done is to encourage China to look elsewhere and adjust their practices (so they) are less reliant on the US soybean industry,' said Mr Steenhoek. 'Once those systemic changes are made, they do not easily come back.'