Chi­nese soy­bean im­port fore­cast cut in face of trade war

Global Times US Edition - - BIZMARKETS -

China on Thurs­day cut its fore­cast for soy­bean im­ports for the 2018/19 crop year, warn­ing that higher prices due to the trade con­flict with the US would curb de­mand as farm­ers switch to al­ter­na­tive in­gre­di­ents for their animal feed.

Im­ports of soy­beans in the crop year that starts on Oc­to­ber 1 will be 93.85 mil­lion tons, down 1.8 mil­lion tons, or 2 per­cent, from last month’s es­ti­mate, the Min­istry of Agriculture and Ru­ral Af­fairs (MOA) said in its monthly crop re­port.

That com­pares with its es­ti­mate of 95.97 mil­lion for the 2017/18 crop year and, ac­cord­ing to US govern­ment records, would be the low­est im­port level since 2016/17.

China on July 6 im­posed 25 per­cent tar­iffs on $34 bil­lion worth of US goods, in­clud­ing soy­beans, in re­sponse to US du­ties im­posed the same day on Chi­nese prod­ucts worth a sim­i­lar value.

The min­istry’s Chi­nese Agri­cul­tural Sup­ply and De­mand Es­ti­mates (CASDE) re­port said that the new tar­iffs on US ship­ments in­tro­duced would in­flate prices of the oilseed.

That means that crush­ers, who make meal and oil from the beans, will turn to other sources of pro­tein, the min­istry said.

That could be good news for pro­duc­ers of rape­seed, peanuts or sunflower seeds.

It also comes as de­mand for soymeal has al­ready been hit by losses in the pig farm­ing sec­tor, the re­port said.

The ex­tra tar­iffs are ex­pected to push up China’s soy­bean im­port costs by 100 yuan ($14.95) per ton from the pre­vi­ous month’s fore­cast, the CASDE re­port said.

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