HARBIN, China (Reuters) — China will almost entirely replace its soybean imports from the United States with Brazilian beans and other origins in the upcoming season but may run out of the oilseed in early 2019, said an executive with a top crusher.
The forecast was one of the most bearish yet on the impact of the Sino-U.S. trade war on American farmers.
The world’s top buyer of soybeans bought about 60 percent of U.S. soybean exports last year but has been mostly out of the market since Beijing imposed a 25 percent tariff on U.S. beans July 6 in retaliation for U.S. tariffs on Chinese goods.
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Imports from the U.S. will plunge further in the 2018-19 season starting this month to just 700,000 tonnes, said Guo Yanchao, deputy chair of Jiusan Group.
That compares with 27.85 million tonnes of U.S. soybeans imported in the previous year.
Overall, China’s imports of soybeans for the year will drop to 84.67 million tonnes, down 10.79 million tonnes from last year’s purchases, Guo said.
That would include 71.06 million tonnes from Brazil, 7.5 million from Argentina and the rest from Canada, Russia and other countries, he said.
Guo’s comments echo those of a top executive at another major crusher, who said China’s imports could tumble to 86 million tonnes.
Still, Guo expected stocks of imported beans at ports to drop to historical lows by November, pushing soymeal prices “very high” and hurting demand for the ingredient in the first quarter of 2019.
Supplies could run out by February or March next year, he warned, when Brazilian beans will be limited. At that time, some private companies could take the risk and buy beans from the U.S., he said.
China is also expected to increase imports of alternative meals and boost domestic crushing volume to 3.4 million tonnes, while selling 1.6 million tonnes from state reserves.
