China cutting US soybean purchases in face of tariffs threat
With the threat of tariffs and counter-tariffs between Washington and Beijing looming, Chinese buyers are canceling orders for U.S. soybeans, a trend that could deal a blow to American farmers if it continues.
It can take a month or more for soybean shipments to travel from the U.S. to China. Any soybeans on their way to China now could be hit by the tariff by the time they arrive.
“The Chinese aren’t willing to buy US soybeans with a 25 percent tax hanging over their head,” said Dan Basse, president of AgResource, an agricultural research and advisory firm. “You just don’t want the risk.”
Basse said that it has been roughly three weeks since China has made any major soybean purchases, an unusually long delay.
Some Chinese buyers might be showing support for their government in the trade dispute by turning away U.S. soybeans, Basse said. The dispute may also make it seem too risky to buy from the United States over the long run.
“The United States could lose the reliable supplier label that we’ve had these many years,” Basse said.
Data from the U.S. government shows that sales of soybeans have fallen from about 255,000 metric tons in the first week of April, when the trade dispute began, to just 7,900 in the week that ended April 26.
Cancellations have also jumped, to more than 140,000 metric tons in the week ending April 26. In the same week last year, there were no canceled sales at all.