By Andi Anderson
With only one month left in the year, there is growing uncertainty about whether China will meet its pledge to purchase at least 12 million metric tons of U.S. soybeans.
Commodity traders and agricultural economists are watching closely, and opinions remain divided as the deadline approaches. Reports suggest that China may try to increase its buying pace, but unclear shipment timelines have created further questions.
According to Bloomberg reports, some traders believe purchases could rise soon. State-backed importers are expected to take more shipments in the coming weeks to help China meet its commitment.
These shipments relate to a pledge made in late October after discussions between global leaders. However, the timing and final volume remain uncertain.
“State-owned importers including Cofco will take more shipments in the coming weeks, said traders from commercial and state buyers, who asked not to be named as they are not authorized to speak with the media.” Traders also indicated that these volumes could help China meet the target, although challenges remain.
“Unless there are political impediments, ‘there would be no reason for them not to at least have made that amount of sales. Whether it’s shipped or not, that’s another thing,’ said Wayne Gordon of UBS Group AG’s wealth management arm.” Yet data shows China has booked only around 3 million metric tons so far, meaning a large shortfall must be filled quickly.
Agricultural economists also express doubts. In a recent survey, “more than three-quarters (76%) of economists surveyed say China won’t purchase that amount of soybeans this year; 24% of economists think China will.” Market expectations have shifted as analysts predict China may take less than the full amount.
Arlan Suderman explained current market assumptions: “‘I think the market has priced in expectations that maybe they’ll take 8 to 10 million metric tons, and they’ll take it during the marketing year between now and the end of August,’ he says.” He added that even with tariff changes, U.S. soybeans remain more expensive than Brazilian shipments.
Another development complicating global soybean trade is China’s recent action against several Brazilian exporters. Reports confirm that China has banned five facilities due to contamination concerns. “‘This is about five facilities, among more than 2,000 authorized to export soybeans to China,’ the ministry said without providing additional details. ‘The case is being addressed as a matter of utmost priority.’”
The suspended exporters reportedly include plants connected to major international firms. These events add new uncertainty to the global soybean market as the year-end deadline approaches.
Photo Credit: gettyimages-zoran-zeremski
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