Trump hopes for Xi, but China won’t buy US soybeans

China had announced that it would purchase large quantities of soybeans from the USA. But new data shows that this hasn’t happened yet. What’s behind it.

Sales of US soybeans to China have come to a virtual standstill for weeks. After the trade deal with Xi Jinping at the end of October, Donald Trump announced that China would buy twelve million tons of soybeans by the end of January. But according to the US Department of Agriculture, Beijing has only ordered around 332,000 tonnes since the summit – a fraction of the promised amount.

The US President escalated the trade conflict with China over the course of the year and introduced tariffs well over 100 percent. The People’s Republic then responded with countermeasures. Both sides agreed in negotiations to reduce tariffs again. But trade relations between the world’s two largest economies may have suffered lasting damage – to the detriment of an important group of Trump voters.

Since the beginning of the trade conflict, Beijing has been looking for other suppliers – especially Brazil and Argentina. Both countries significantly expanded their exports, so that China is now largely independent of US soybeans. According to Reuters, warehouses in Chinese ports are now filled with around ten million tons. Bloomberg reports that because of these full storage facilities and low margins, traders see little reason to buy US beans.

Another factor is the price. Despite slight tariff reductions, US beans remain more expensive than South American goods due to a surcharge of around 13 percent. Traders report that Chinese companies can hardly make a profit from this. Brazil and Argentina, on the other hand, deliver cheaper and in large quantities. This means that American providers are out of the running before negotiations even begin.

Soybeans are the most important export for US agriculture. In China they are primarily used as a basis for animal feed: a large proportion is processed into soy meal for pig and poultry fattening, and soy oil is also used in food production.

Many farmers in the Midwest are among Trump’s core voters – and were therefore hoping for a quick recovery in trade. But now the situation is getting even worse for the farmers. Because without the most important international buyer, our own silos continue to fill up. Experts estimate that around $5.7 billion in export value has already been lost in the soy sector alone.

Nevertheless, there is still a time window: there are still around a month and a half until the end of January. If Chinese buyers secure larger quantities in the short term, part of the backlog could be offset. However, it is still unclear whether Beijing will actually reach the targets set by Washington.