EU sources say US soybean imports to rise on “market reasons”

31.07.2018

The EU will import more soybeans, but only as much as it needs and in quantities that will be determined by market forces, EU Commission sources told Agricensus Monday.

“Since the Chinese measures on US soybeans have been imposed, the prices of US soybeans have gone down while demand for Brazilian and Argentinian soybeans increased, an EU Commission source said.

"We will therefore be in a position to import more from the US at a cheaper price – for market reasons and in quantities that correspond to our needs,” one source said.

Last week, President Trump and EU Commission president, Jean Claude Juncker, sparked speculation that fresh agricultural trade policy was on the horizon when they announced they were seeking a new trade deal and added that the EU would import “a lot of soybeans”.

The announcement prompted soybean futures to spike 2% and sparked a flurry of communications between lobby groups and EU officials over what Juncker meant, including speculation that the EU could weaken its tough labelling standard on genetically modified crops.

However, since then EU officials have sought to distance themselves from Juncker's statement, hinting that there will be no new policy measures and any increase will be for market fundamentals.

On Friday, the EU Commission spokesperson said agriculture was “out of the scope of these discussions.”

And on Monday, other Commission sources told Agricensus that there was little that could be done policy-wise as there are no soybean import duties and that the minimal tariff on soymeal that the EU applies would likely have no impact on US imports.

Short of animal feed, the EU imports close to 14 million mt of soybeans every year, with Brazil accounting for 40% versus US supply of 33%.

In addition, the EU imports a further 16 million mt of soymeal, although almost 90% of that comes from Argentina and Brazil – the world’s dominant suppliers.

However, with US soybeans at a steep discount to Brazilian produce after China slapped an import tax on US beans in July, it is likely Brazilian exports to the EU will fall sharply next year and be replaced by US supply.

Despite Juncker's office maintaining agriculture trade would not be discussed, US Trade Secretary Stephen Mnuchin told Fox News on Sunday that there would be discussion on how to "break down the barriers on agriculture and have more opportunities for our farmers."


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