American farmers sitting on record soybean stockpiles after sales to China tank
America's soybean farmers were scrambling to find new export markets in response to the sharp drop in Chinese demand, including in Europe, emerging countries in Southeast Asia, Egypt, Bangladesh and Pakistan.
However, those new export destinations had only made up for roughly half the shortfall in demand, only sales in Europe had fared "well".
In remarks to CNBC, Jim Sutter, chief executive officer of the US Soybean Export Council, predicted that overseas sales soybeans would fall from 30.0m tonnes in 2018 to around 10.0m tonnes in 2019, as Chinese companies shifted their purchases to Brazil in response to the trade war with the US.
Expressed in local currency terms, Brazilian soybean prices had climbed to their highest level for two months and port premiums in the South American giant had soared by approximately 70.0%.
US farmers' plight was made worse by Beijing's decision on 2 August to halt all purchases of American agricultural commodities after the White House threatened to impose a 10.0% tariff on a further $300.0bn of Chinese exports starting from 1 September.
China was the world’s largest consumer of soybeans, accounting for roughly 60.0% of US soybean exports before the trade war kicked off and for $5.9 of agricultural purchases in 2018, US census data showed.
Separately, the US Department of Agriculture was projecting that the trade war would leave soybean farmers in the States sitting on a record stock of 1.0bn bushels for the current marketing year ending on 31 August.