US soybean exports were a big casualty of the escalating trade tensions between the US and China but are now set to benefit from Beijing’s pledge to import more American goods. After two days of talks in Washington last week, both sides recently declared an economic truce and put their tariffs plans on hold. In a joint statement released by the White House, China said it agreed to “meaningful increases in U.S. agriculture and energy exports”.
Fearing potential tariffs being imposed on their soybean cargos Chinese buyers cancelled several shipments from the US over the past few months. China’s imports from the US declined by 21% from 17.7mt in 1Q17 to 14mt in 1Q18 as a result. By contrast their imports from Brazil more than doubled to 6.2mt during the same period.
It is not possible to quantify the “meaningful increases” in exports that China agreed as the joint statement lacked details. China’s soybean imports from the US was flat at 33mt in 2017 while its imports from Brazil surged from 38mt in 2016 to 51mt last year. China could direct its state owned crushers to buy more from the US. According to the US Soybean Export Council such a move would potentially add 14mt of imports worth $6bn to this year’s trade bill, at the expense of major exporters, Brazil and Argentina.
Sources:Arrow
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