Chinese soybean importers, who buy around 60% of global production, could import up to 25% less this quarter thanks to a tariff war with the U.S., Reuters reports. It would be the biggest drop in 12 years.
China imported 24.1 million metric tons of soybeans in the fourth quarter of 2017, much of it to feed its record pig population. It will only import around 18 to 20 million metric tons this quarter, according to an anonymous trader quoted by Reuters, and those purchases will largely be from Brazil, Argentina, and Canada.
The U.S. enacted a 25% tariff on numerous products in July, and China followed suit the next day. The two countries have been expanding their trade war since. Even though U.S. soy is still competitive with Brazilian soy, importers worry that tariffs could change between ordering a shipment and its arrival or that Chinese authorities will prevent landings altogether.
Chicago soybean commodity prices hit a ten-year low last month.
Chinese traders say they figure there is enough soybean in reserve in Chinese ports and warehouses to prevent shortages for the next half year or so.
Soybeans are a major U.S. export, but it had already been overtaken by Brazilian exporters in 2013. Brazil stands to be a major beneficiary of the U.S.-China tariff war.