The uncertainties of the trade dispute between China and the United States still cause concern and anxiety among members of the global soybean industry. According to data from the United States Department of Agriculture (USDA), the effect of China's reduction in soybean purchases is expected to be a decrease of 16 million tons on an annualized basis. In this scenario, this would equate to about US$5.2 billion in export earnings, based on current prices for US exported soybeans. Dorsey & Whitney attorney Dave Townsend, who is part of the firm's Corporate Group and its security and technology trade practice groups, revealed that the US Congress and Donald Trump's administration are offering US$3.6 billion in payments to US soybean producers to partially offset the loss.
“US soybean exports have been slow because China was the biggest buyer,” said Brett Cooper, director of the Commodities Division at Pacific INTL FCStone, stating that in early December, the US exported 13.3 million tons, almost 10 million less than last year.
For the 2018/2019 marketing year, which ends in August of this year, the USDA expects the US to have stocks of 25.99 million tons, which is the highest on record. Over the previous 10 years, the average amount of soybean stocks was just 5.5 million. “US farmers are in a difficult position because they just harvested the largest soybean crop ever (125 million tons) and the largest export customer is not buying the soybeans,” he adds.
Source: agrolink | Author: Leonardo Gottems
