US soybean sector expects record exports to China as phase 1 deal continues
Published: Apr 14, 2021 08:58 PM
soybean Photo:Xinhua

soybean Photo:Xinhua

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. 

A report by the Purdue Center for Commercial Agriculture issued on April 6 said that more US producers had concerns about China fulfilling its phase one trade agreement with the US.

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 - assuming that Mother Nature helps US farmers harvest another high-quality and sustainably produced soybean crop," said Sutter.

"Last year, both sides made great efforts, but some inevitable factors slowed the progress. This year has seen a detente in both countries, with China's demand remain relatively strong and the supply capacity of the US gradually recovering," Gao Lingyun, an expert at the Chinese Academy of Social Sciences in Beijing who closely follows China-US trade relations, told the Global Times on Wednesday.

Gao noted that it would be easier to complete the first phase of the agreement, if the US could ease up restrictions on exports to China involving some higher value-added items.

"We are confident that we can achieve our goal, but it will require cooperation and efforts from both sides," noted Gao.