China prepares for long US soybean stand-off with huge Brazilian imports

China’s soybean imports remained at historically high levels in August, with companies making huge purchases from Brazil and other South American growers as they prepared for a protracted trade stand-off between Beijing and Washington.

More than 12.2 million tonnes of soybeans entered China in August – the second-highest monthly total the country has ever recorded after May’s 13.9 million tonne inflow, according to detailed Chinese customs data released over the weekend.

Brazil provided 10.49 million tonnes – or more than 85 per cent – of those imports, as a bumper crop allowed China to increase its purchases from the South American nation by 2.4 per cent year on year.

China has now logged four consecutive months of record soybean imports, as the country tries to hedge against potential supply uncertainty in the fourth quarter caused by the ongoing trade war with the United States.

The harvest season for soybeans varies across regions, with the US season due to begin in the autumn. That means the impact of Chinese tariffs on US agricultural products will begin to be felt more acutely towards the end of the year.

The US was once China’s largest supplier of soybeans – which is a key input to the country’s animal feed industry – but Beijing has taken steps to reduce its reliance on American crops as tensions between the two powers have risen in recent years.

Imports from the US reached 227,000 tonnes last month, an uptick of 12.3 per cent year on year, though the amount still represented a small fraction of China’s total.

South China Morning Post