‘US soya farmers eye new markets’ – that’s the headline of an article in today’s Business Day and also in The Wall Street Journal. It notes that ‘With trade tension cutting deeply into exports, US soybean farmers, industry groups and US government officials are looking for a stronger foothold in the global markets beyond China, including Europe and Southeast Asia.’
This is all good and well, but honestly, the Americans will have a hard time finding new soybean markets, beyond China.
China is a big deal – it accounts for more than two-thirds of global soybean imports – see Figure 1 below.
Trailing China is Mexico, the Netherlands, Spain, Japan, Germany and Thailand. The US is already a leading supplier of soybeans in these markets and it is unlikely that the soybean demand in the aforementioned countries will grow in the near future at the pace we have witnessed in China.
Therefore, the US soybean farmers, industry groups and government officials’ quest to look beyond China for exports markets might prove fruitless. There is just not enough demand outside China.
Over the past 5-years, the US accounted for roughly 38% of global soybean exports and their leading market was China, with about 60% share. Now, to suddenly think two-thirds of your soybean market could be replaced by other countries in a short space of time ishard to comprehend. This is all public information and surely the US knows this. One wonders whether their statements are just ‘grandstanding’?
Anyway, let me not be negative in the morning – just yesterday, China was back buying US soybeans – maybe things will somewhat normalise over time.
Recommended reading for today — Draft bill on expropriation excludes the arbitrary seizure of property — by Thulas Nxesi and Jeremy Cronin, the Minister and Deputy Minister of Public Works, respectively.
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