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According to Reuters, China’s soybean imports surged to a record high last month as the world’s top buyer turned to Brazil for supplies. Concerns over potential tariffs on US imports may have spurred its neighbor, Vietnam, to also import this commodity.
Specifically, Chinese customs data showed that the Asian country’s soybean purchases in May doubled from the previous month to 13.92 million tons, a 73% increase.
Chinese soybean processors have been quickly seeking cheap soybeans from South America, with at least 40 shipments from Brazil in one week in early April. They worry that trade tensions could further complicate purchases of the crop from the US.
While Beijing is diversifying its agricultural purchases, including buying more from Brazil, currently the largest soybean supplier, this crop remains the top agricultural export from the US to China. Beijing lowered tariffs on all US products after the two countries reached a trade truce in Geneva in May. However, additional tariffs imposed earlier on a range of US agricultural products, including soybeans, remain in place.
A senior official from China’s state planner said in April that domestic grain supplies would not be affected by the loss of grain and oilseed imports from the US used for animal feed, thanks to abundant alternative supplies in the global market and large enough domestic reserves.
Brazil will export more soybeans to China and key customers in Europe, the Middle East, and Southeast Asia by 2025 amid the ongoing trade war between the US and China, said a director of the Abiove industry group.
Daniel Amaral, director of economics and legal affairs at Abiove, said Brazil’s record soybean harvest of nearly 170 million tons would also boost exports.
“Hopefully, Brazil, with its good relationships with trading partners… and as a major food supplier, can further develop our agriculture,” Amaral said.
He said it is currently difficult to measure the outcome of the trade war as tariff issues are very volatile.
But the Abiove director said Brazil, the world’s largest soybean producer and exporter, will be a reliable supplier with this harvest and growing production.
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