Beijing: As trade tensions between the US and China continue to escalate with new measures from both sides, soybeans have become a pivotal element in the ongoing trade conflict. The increasing friction between the two nations has heightened risk perception in global markets, influencing commodity prices.
According to Philippines News Agency, China recently implemented additional restrictions on the export of rare earth elements. In response, US President Donald Trump announced a 100 percent tariff on top of the existing rate on Beijing, effective November 1, and imposed export controls on all critical software. Trump has accused China, through a social media post, of ‘purposefully not buying’ American soybeans.
China has diversified its soybean imports to replace the US as a source since Trump’s administration began. Reports indicate that China has yet to secure a significant portion of its soybean supply for December and January, while high prices for Brazilian soybeans are deterring buyers. This situation may compel Beijing to utilize state reserves to meet immediate soybean needs, impacting the soybean market.
Soybeans started 2025 at USD10.10 per bushel, fell to USD9.70 during the year, and stabilized around USD10.82. ‘Soybeans hold sociopolitical importance in Washington, as farmers were instrumental in Trump’s election,’ Sadi Kaymaz, an Asia markets expert, told Anadolu. The United States and Brazil are the world’s two largest soybean exporters, but China is not self-sufficient.
Kaymaz highlighted that China’s large livestock industry necessitates substantial soybean imports, and due to US-China tensions, Beijing has increasingly turned to Brazil. Soybeans have traded weakly this year on the Chicago Mercantile Exchange as China has significantly reduced US orders.
High interest rates and rising fertilizer costs are exerting additional pressure on farmers. ‘Agricultural analysts indicate China needs to purchase around 10 million tons of soybeans by year-end,’ Kaymaz added. Brazilian shipments have risen nearly USD3 per bushel due to weather and transport costs, and China is adopting a wait-and-see approach as Brazilian soybeans remain costly and US soybeans are ‘politically off-limits.’
Chinese agricultural analysts suggest state reserves might be used, as the 44-million-ton commercial stock accumulated over years can act as a buffer. Kaymaz noted that a potential trade war ceasefire could drive up soybean prices.
Brazil’s soybean export volumes exceeded 102 million tons in the first nine months of the year, setting a record, with China consuming a significant portion. China remains the largest market for various resources, including pulp, coffee, and corn, as well as the world’s largest iron ore miner, Vale. Post a 50 percent tariff on Brazil by Trump, China increased its Arabica coffee bean purchases.
