Chinese Buyers Shift to Brazilian Soybeans Amid Trump Inauguration Fears

Chinese soybean processors are increasingly opting for competitively priced Brazilian cargoes over U.S. oilseeds, driven by concerns that President-elect Donald Trump may impose import tariffs upon taking office on January 20. This shift reflects the ongoing worries about renewed trade tensions that could disrupt trade flows to China, the world’s largest importer of agricultural goods.

Key Highlights:
Market Shift:

Chinese processors have secured nearly all their soybean cargoes from Brazil for first-quarter shipments, marking a complete shift away from U.S. suppliers.
In 2023, Brazil accounted for 54% of China’s first-quarter soybean imports, while the U.S. provided 38%.
Trade Dynamics:

A trader in Singapore noted, “Chinese crushers are now booking Brazilian cargoes for February and March shipment… It is a 100% shift to Brazil.”
Trump’s administration has previously threatened tariffs ranging from 10% to 60% on Chinese goods, which could lead to retaliatory duties on U.S. farm products.
Historical Context:

During Trump’s first term in 2018, the U.S. and China engaged in a trade war that resulted in China permanently reducing its reliance on American farm goods.
The share of U.S. soybean imports by China fell to 18% in the first 11 months of 2024, down from 40% in 2016, while Brazil’s share increased to 74% from 46%.
Current Market Conditions:

South American soybeans dominate global trade until U.S. supplies become available in August. However, this year, Chinese importers are turning to Brazilian beans earlier than usual.
U.S. suppliers may face a surplus of 10.34 million metric tons of beans by the end of the 2024/25 marketing year, the highest in five years, as per USDA estimates.
Price Competitiveness:

Brazilian soybeans are priced at $420 per ton (including cost and freight) for February shipments to China, compared to U.S. Pacific Northwest cargoes at around $451 per ton.
Analysts attribute the increased Brazilian imports to favorable weather conditions in Brazil and the depreciation of the Brazilian real, which have lowered production costs.
Forecasts:

China’s first-quarter soybean imports are projected to decline to 17.3-18.0 million metric tons, down from 18.58 million tons the previous year, largely due to an oversupply of imported soybeans in 2024.
Despite the shift towards Brazilian supplies, state stockpiler Sinograin continues to seek U.S. soybeans for their higher oil content.

Chinese Buyers Shift to Brazilian Soybeans Amid Trump Inauguration Fears
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