China’s pledge to buy more U.S. ag products will likely come at the expense of Brazil. The South China Morning Post reports a deal between the U.S. and China could turn Brazil’s expected bumper crop of soybeans into a glut.
Brazil is nearing harvest time of the crop as it was thought to be the primary supplier of soybeans to China due to the U.S.-China trade war.
But, with China and the U.S. halting further tariffs and working through a 90-day period to strike a deal, along with China’s promise to buy more U.S. ag products, Brazil farmers seem likely to lose the China demand.
China imported 6.92 million metric tons of soybeans in October, of which 6.53 million, or 94 percent, from Brazil – almost double the 3.38 million metric tons imported from Brazil a year earlier.
China has depleted Brazil’s market regardless over the last few months, meaning China would have to eventually turn back to the U.S. for soybeans.
Agriculture Secretary Sonny Perdue said earlier this week that the Chinese purchases of U.S. ag products are likely to start around the beginning of January and 2019.