China has taken measures to diversify its soybean import channels so as to reduce the possible effects of trade tensions.
China's soybean import volume from Brazil has increased in recent months, setting a record high in May and jumping over 10 percent year-on-year in June. Meanwhile, the country has waived tariffs on soybean imports from neighbors such as India and South Korea. All of these measures aim to reduce the effects of higher tariffs on American soybeans.
"It is necessary for China to reduce its reliance on American soybeans, and the country has already made adjustments to expand import channels," said Li Yan, associate professor of the School of Maritime Economics and Management of Dalian Maritime University.
Professor Li Yan specializes in trade and global value chain. She says US soybeans now account for about one third of China’s total demand for imported soybeans -- only half of the level seen in 2014.
"If we only look at soybeans, the impact on Chinese companies is smaller than on the American soybean industry," said Wang Xiaohui, agricultural analyst of Orient Securities Futures.
Agricultural analyst Wang Xiaohui is an external counsel to the Dalian Commodity Exchange. She said domestic soybean futures have returned to fundamental levels and soybean prices will not rise too swiftly in China this year.
Nevertheless, Wang pointed out that the trade conflict has forced Chinese firms to spend ample time finding replacement sources for American soybeans. And now, US soybean farmers may face gaping losses via the Chinese market.
Sources:cctvplus
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