Expanding Market for Soybeans Puts Dent in Trade Losses

American farmers are now supplying more than half of the European Union’s soybeans, according to figures the European Commission released late last week.

Over 12 weeks from July through mid-September, U.S. soy exports to the EU were 133 percent higher than during the same period last year. The U.S. accounted for 52 percent of all EU soybean imports, compared with 25 percent over the same period in 2017.

Here’s the catch: While the increase in European imports helps farmers, it doesn’t come close to replacing the business with China that U.S. soybean growers have lost due to retaliatory tariffs.

The U.S. exported about $587 million worth of soybeans to Europe over the 12-week period, which is about $2.5 billion on an annualized basis. China, the world’s largest importer of soybeans, bought $12.3 billion worth of U.S. soybeans in 2017—60 percent of U.S. soy exports.

Those sales have dried up since China imposed a 25 percent retaliatory duty on soybeans and a host of other U.S. agricultural exports in July. The price of soybeans has plummeted about $2 per bushel, or 20 percent, since June—making them “very attractive” to European buyers, the European Commission noted in its announcement. USDA projects agricultural exports to China will drop by $7 billion in the fiscal year starting Oct. 1 “as soybean sales are expected to be sharply lower due to retaliatory tariffs.”

Source: Politico