Source: Оleoscope (Russia)
The U.S. is facing growing trade problems due to a sharp drop in soybean shipments to China, reports Farms.com.
The agricultural trade situation in the United States is becoming increasingly difficult, as evidenced by a growing trade deficit caused primarily by a decline in soybean exports.
USDA economist James Kaufman noted that agricultural exports fell to $13.7 billion in May, down nearly 2% from a year earlier and leading to a 5% decline in total exports in fiscal year 2024 compared to 2023.
The 4% increase in agricultural imports, which is due to the strong US economy and the dollar exchange rate, is in stark contrast to the decline in export earnings. The current agricultural trade deficit amounts to USD 15 billion and there has been an 18% decline in the most important bulk goods.
Particularly striking is the decline in soybean exports, which fell by 23% year-on-year from 30.5 million tons to 23.4 million tons to China.
This decline is largely due to Brazil’s competitive advantage in terms of price and supply, which is why China sources the majority of its soybeans from Brazil and not from the USA. Overall, soybean exports from the US fell by 19% this season.
This significant change in trade dynamics calls for a reevaluation of U.S. agricultural export strategies with a focus on competitiveness and market adjustment to mitigate the growing trade deficit and its impact on U.S. farmers.
Earlier, it was reported that China, the world’s largest importer of soybeans, made its first purchase of US soybeans for the coming season – several months later than usual. Soybean futures in Chicago have fallen about 17 percent this year, and earlier this week prices hit their lowest level since 2020.