China tariff warning does not faze soybean, meal markets

21.03.2018

Soybean and soybean meal futures markets on Tuesday largely ignored comments from Chinese media that said the government may impose tariffs on US soybean imports.

Front-month CBOT soybean futures settled 5.75 cents higher on the day at $10.2825/bushel. Front-month soybean meal futures settled $3.10/st higher at $361.70/st.

A broker on Tuesday said the market doesn't think the country can completely abandon US soybeans.

"I think the market views a Chinese tariff on US soybeans as very unlikely, and infeasible for China," the source said.

China imported with 95.5 million mt of soybeans in 2017, with the majority coming for the US. Most analysts doubt that the country's No. 2 source, Brazil, has the stocks to supply China with the product it needs.

In an op-ed by China's Global Times, the state-owned newspaper warned that if the Trump administration imposed new tariffs, the Chinese government would impose its own tariffs on US soybean imports to China.

The Global Times said subsidized soybeans from the US had been dumped on the Chinese market to the detriment of Chinese farmers. The newspaper added that the government should take action.

"Strong restrictive measures need to be taken against the massive subsidies and dumping of soybeans by some countries on China," the newspaper stated. "This can reduce the adverse effects of imported soybeans on the Chinese market and provide a fair and sound environment for the sustainable development of the Chinese soybean industry."

Chinese is the biggest importer of US soybeans, accounting for 57.25% or $12.35 billion of all US soybean exports in 2017, according to US Department of Agriculture data.


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