US soybean sector expects record exports to China

The US soybean sector is expecting record exports of about 36 million metric tons to China in the 2020/ 21 marketing year, as the China- US phase one trade deal remains in force, a senior industry representative told the Global Times.

The uplifting sentiment toward the prospect of US soybean exports to China stood in stark contrast to recent reports of serious hurdles for the politically sensitive trade between the two countries, including tight stockpiles in the US, soar prices and rising diplomatic tension.

“We are at a record level for 2021 new [ US] soybean crop shipment positions starting Sept 1, 2021 onwards,” Jim Sutter, CEO of the US Soybean Export Council ( USSEC), said in a statement sent to the Global Times on Wednesday.

As of April 1, China has purchased 2.6 million metric tons of US soybeans, smashing the previous record of 2.4 million tons for new soybean crop sales in 2015. In total, the US soybean industry is expecting about 36 million metric tons in soybean exports to China in the 2020/ 21 marketing year, according to Sutter.

China is the world’s largest consumer of soybeans, importing more than 100 million tons last year, and demand continues to boom, with countries such as the US being China’s largest source of soybeans.

However, soybean stocks in the US fell further to 3.26 million tons in March, the lowest level since 2013, and supplies in the US may run out after the summer, according to media reports. Driven by falling stockpiles, Chicago Mercantile Exchange soybean prices hit a six- year high of $ 14.13 a bushel in March.

The US soybean price boom and stockpile shortage have together led some Chinese demand to shift to other sources, such as Brazil, according to some media reports.

Some have also raised questions about whether political tensions between China and the US have affected full implementation of the phase one trade agreement, under which China has pledged to increase purchase of US soybeans and other products.

In his statement, Sutter said that he was expecting a “tight domestic situation” and that it was “typical for this time of year” that China switches its imports to South America.

However, “we expect that the Phase 1 trade agreement will continue to apply through December 2021, which would go into our new US soybean crop harvest, so exports could grow,” said Sutter.