China, the world's largest buyer of oilseeds, has reached a record volume of soybean imports in 2024, amid growing US-China trade tensions. According to customs data released on Monday, the country imported 105.03 million tons of the grain, registering an increase of 6.5% compared to the previous year.
The historic milestone was driven by factors including falling soybean prices on the Chicago Board of Trade, attractive crushing margins and a rush by buyers to secure supplies ahead of the inauguration of U.S. President-elect Donald Trump. Trump, who will take office on Jan. 20, has already signaled the possibility of implementing severe trade tariffs, raising fears of a trade war.
December imports: Drop surprises analysts
Despite the annual record, December imports stood at 7.94 million tonnes, which represents a decrease of 0.2% compared to the same period in 2023. Consequently, this volume was the lowest in four years and was significantly below analysts' initial estimates, which projected around 8.2 million tonnes.
According to Rosa Wang, an analyst at JCI, a Shanghai-based agri-consultancy firm, “this discrepancy could be linked to the pace of customs clearance.”
However, in the last months of 2024, Chinese buyers prioritized US soybeans, even though Brazilian soybeans were more competitively priced. Therefore, this strategy aimed to protect against possible trade sanctions that could impact trade between the two countries under the Trump administration.
Impacts of trade tensions on the sector
Trump has promised to impose tariffs of up to 60% on Chinese goods, which experts say could trigger retaliation from Beijing and disrupt international trade. Faced with this uncertainty, Chinese traders have been diversifying their suppliers and increasing strategic stocks.
However, even without a trade war, the outlook for 2025 could be challenging. Ample global supply and weakened crush margins point to a possible reduction in U.S. soybean demand.
“A Trump presidency could reignite trade tensions, but the expected decline in Chinese demand will help minimize the impact on prices,” BMI Research said in a note.
Crushing margins in Rizhao, China’s main soybean processing hub, have been negative since November. In December, the last margin recorded was a loss of 225.04 yuan (about $30.69) per tonne processed.
The 2024 record may have been a preemptive effort in an uncertain global scenario. Now, the market awaits the next steps of the new US administration and China's responses to possible tariffs.
Source: Ella Cao and Mei Mei Chu | Notícias Agrícolas
