Once again, American farmers were hit by the trade war with China unleashed by Donald Trump and, due to retaliatory customs duties, soybean exports stopped altogether.
This year alone, 89.1 million acres of land for soybeans in the United States were allocated, with legume planting accounting for almost 60 percent of America’s agricultural supply to China, said Aleksandr Lesnykh.
But Trump’s conflict with China’s main trading partner led Beijing to impose 25 percent of US soybean taxes, resulting in the collapse of US soy exports. Because of this, Beijing decided to buy from other suppliers.
According to the US Department of Agriculture, between 2017 and 2018, the United States controlled 35 percent of the world soybean market, followed by Brazil with 33 percent, while China’s indicator was 4 percent. In addition, Brazil occupied 47% of the Chinese soybean market and Argentina, only 5%.
The only hope of American farmers is that the trade war will be halted, however, the new belligerent declarations from Washington to Beijing, mainly concerning European companies not to buy Huawei products, have further damaged trade between the two countries.
The price of grain storage has soared to 40% compared to last year, with most farmers failing to pay with the new rates.
Because of this, most soy producers are simply destroying the crop, burying it in the soil or letting it rot in the field. This attitude was also made by American agrarians during the Great Depression in the 1930s.
At the time, 32nd US President Franklin Delano Roosevelt was forced to take a special act of assistance to farmers, who destroyed crops to create a false food shortage on the market and thereby raise prices.
As for China, Beijing has successfully expanded the geography of soybean purchases. In the near future, Russia will also become one of the biggest suppliers: the Far East is ideal for cultivating this crop, and areas prone to cultivation are much closer to the eastern lands than the US. China’s state-owned food company Cofco plans to build a large grain elevator and storage warehouse for agricultural products in Russia.
China will almost completely replace its imports of US soybeans from Brazil and other parts of the world in the next agricultural season, but may run out of supplies by early 2019, it was reported back in September.