U.S. Soybean Share in China to Fall as Argentina Gains Ground

U.S. soybean exports to China are set to decline further in 2024 as Argentina and Brazil increase their share in the world’s largest soybean market. Argentina’s production is expected to surge to 50 million metric tons, more than doubling from last year’s drought-stricken 21 million tons, thereby heightening competition for U.S. suppliers.

As Brazilian and Argentine soybeans offer more competitive prices, U.S. share in China’s soybean imports has dropped significantly, falling to under a quarter last year compared to 51% in 2009. Traders point out that rising Chinese demand is increasingly being met by South American countries. One Singapore-based trader noted, “This year we have large soybean supply coming from Argentina which is going to heat up competition. U.S. share is already shrinking. They are going to lose more to Argentina this year.”

Political uncertainties in the U.S., particularly the upcoming presidential election, also contribute to the shift in Chinese buying patterns. Chinese traders are diversifying their sources to lower risks of supply disruptions that could result from political changes. A Shanghai-based trader remarked, “U.S. market share will continue to decline because you have the political backdrop of elections.”

To counter these challenges, U.S. growers are exploring newer markets like Southeast Asia and focusing on increased domestic demand for renewable fuels. However, Jeff O’Connor, a soybean farmer from Illinois, the top-producing state, acknowledges the difficulty in offsetting the loss of the Chinese market: “What we are losing internationally to China we cannot make up for domestically in one year’s time. We cannot replace that overnight.”

Source: Agriculture.com