In spite of an ongoing trade war between the world’s two largest economies, China may actually have to start buying U.S. soybeans in the near future.
A Reuters report says oil seed analysis organization Oil World, based in Germany, says South American countries can’t supply all the soybeans that China needs. China is the world’s largest soybean buyer and has been buying South American supplies to make up for the shortfall caused by the trade war with America. However, South American supplies that are actually available for export are down.
The latest newsletter from Oil World says China will have to buy more U.S. soybeans. “The South American supply shortage will make it necessary for China, in our opinion, to import 15 million tons of U.S. soybeans in October 2018/March 2019, even if the trade war isn’t resolved,” Oil World says in its newsletter. Oil World also says those Chinese purchases of U.S. soybeans could start again in the “coming weeks.” Otherwise, without buying from America, domestic supplies of soybeans will get very tight in China.