According to MarketWatch, China’s boycott of U.S. soybeans made a significant contribution to the country’s October trade report. According to data from the U.S. Bureau of Economic Analysis and the U.S. Census Bureau, the deficit increased from $54.6 billion in September (revised) to $55.5 billion in October, as exports decreased and imports increased.
The BEA reports that the exports of goods decreased $0.4 billion to $141.5 billion in October with foods, feeds and beverages down $0.7 billion. Soybeans decreased $0.8 billion. The deficit with China increased $0.7 billion to $38.2 billion in October. Exports decreased $2.6 billion to $7.6 billion and imports decreased $1.9 billion to $45.7 billion.
The U.S. has been the largest producer of soybeans in the world, but the Brazil surpassed the U.S. in soybean exports for the first time in 2017. The U.S. was the second largest exporter of soybeans with more than half going to China, which is easily the largest importer of soybeans in the world.
The American Farm Bureau reported that USDA’s Federal Grain Inspection Service reveals that through the first 7 weeks of the 2018-19 marketing year, 7.4 million bushels of new-crop U.S. soybeans have been shipped to China, down 97% from prior year levels. Through the first 7 weeks of the previous marketing year, the U.S. shipped 239 million bushels of soybeans to China, and during that same period in the 2016-17 marketing year the U.S. shipped 211 million bushels.
The retaliatory tariffs of 28% on U.S.-sourced soybeans have resulted in a sharp decline in China’s purchases. Shipments of soybeans to China have fallen by 98% along the Mississippi River, 95% out of the Columbia River and by 91% from the Puget Sound. Shippers in the Interior, South Atlantic and East Gulf regions have yet to make a soybean shipment to China.
Largely due to the slowdown in Chinese purchases, total soybean exports have also fallen significantly. Through the first 7 weeks of the marketing year, soybean exports have totaled 218 million bushels, down 41%, or 149 million bushels, from the 367 million bushels shipped during the first seven weeks of the 2017-18 marketing year.
While China has purchased 231 million fewer bushels of soybeans this year than during the same period last year, other trading partners have taken advantage of lower-priced U.S. soybeans and increased their purchases. Currently, the U.S. has shipped soybeans to 41 countries, up from 30 countries last year. Of the 41 countries buying U.S. soybeans, 26 have increased their purchase volumes, representing an increase of 99 million bushels and offsetting the 248 million-bushel decline in exports to the remaining 15 trading partners.