By Naveen Thukral, Ella Cao and Mei Mei Chu
SINGAPORE/BEIJING (Reuters) – Chinese soybean processors have turned to competitively priced Brazilian cargoes instead of U.S. oilseeds amid fears that Washington will impose import tariffs after President-elect Donald Trump takes office on Jan. 20.
Concerns about revived trade tensions during the second Trump administration have already disrupted trade flows to China, the world’s top agricultural importer, prompting buyers to stockpile and look for alternative suppliers.
Chinese processors secured almost all of their cargo from Brazil for delivery in the first quarter, according to three trade sources.
Last year, Brazil accounted for 54% of China’s soybean imports in the first quarter, while the US supplied 38%. China takes more than 60% of the soybeans shipped worldwide.
“Chinese crushers are now booking Brazilian cargoes for shipments in February and March,” said a trader in Singapore. “Both state and private crushers, they all take Brazilian beans. It’s a 100% switch to Brazil.”
Trump has threatened tariffs of 10% to 60% on goods from China, which would likely prompt China’s retaliatory tariffs on American agricultural products.
In 2018, during Trump’s first term, the U.S. and China imposed “one-for-one” tariffs that prompted Beijing to take steady steps to reduce its dependence on U.S. agricultural products.
China’s share of soybean imports from the United States fell to 18% in the first 11 months of 2024, from 40% in all of 2016, while Brazil’s share rose to 74% from 46%, according to Chinese customs data.
South American soybeans, which are harvested early in the year, dominate global trade until US supplies hit the market from August.
But this year, Chinese oilseed importers turned more quickly and en masse to Brazilian beans, hitting American suppliers near the end of their peak marketing season in January.
That is likely to leave the US, the second soybean exporter after Brazil, with 10.34 million metric tons of beans by the end of the 2024/25 marketing year. in August, which is the highest in five years, according to estimates by the US Department of Agriculture.
CHEAPER BEANS
The competitive price of Brazilian soybeans is a key advantage for Chinese importers, traders say.
“Concerns about potential trade tensions, especially after Trump’s re-election, led to increased buying of soybeans in the fourth quarter of 2024, with shipments arriving in late 2024 and the first quarter of 2025,” said Lin Guofa, senior analyst at Bric Agriculture Group. consulting company.
“Favorable weather in Brazil and the depreciation of the real have reduced production costs, encouraging further soybean imports,” Lin added.
The gap between U.S. and Brazilian soybeans widened on expectations of a record crop in the South American country.
Soybeans from Brazil are at $420 a tonne, including costs and freight, to China for February, while US Pacific Northwest freights are around $451 a tonne.
However, large domestic stocks are likely to limit demand for soybeans, traders said.
China’s first-quarter soybean imports are expected to fall to 17.3-18.0 million metric tons, from 18.58 million tons a year ago, according to an average of four analysts’ estimates.
“The main reason was the oversupply of imported soybeans in 2024 and everyone is now waiting for the new Brazilian crops to arrive,” said a Shanghai-based analyst, who declined to be named because he was not authorized to speak to the media.
China imported a record 105.03 million metric tons of soybeans in 2024.
While private buyers are turning to Brazilian supplies, traders say state-owned storage company Sinograin is still in the market for U.S. soybeans, which are favored for storage because of their higher oil content.
