U.S. Soy Exporters Say the Loss of Chinese Market Share May Be Permanent

(Bloomberg) -- It’s increasingly unlikely that American farmers will fully regain their share of the lucrative Chinese soybean market, a U.S. industry group said.

U.S. exports of the oilseed to the biggest importing nation have plunged in the year since the world’s two largest economies begin tit-for-tat tariffs.

“The longer we are out of the China market, the likelihood is that we will not regain all of the share or all of the volume,” Paul Burke, a senior director at the U.S. Soybean Export Council, said on a conference call Friday.

Even if the dispute is resolved, the U.S. would not see a return to record export levels, Burke said. In 2016, China imported an all-time high 36 million metric tons, which sank to 8.3 million tons last year. Soybean futures fell as much as 1.6% to $8.2625 a bushel on Friday after China state media said new trade talks between the countries were meaningless.

China could cancel some of the 7 million tons of U.S. soybeans sold but not yet shipped, according to Roy Huckabay, executive vice president at Chicago-based brokerage Linn & Associates. “We have 100 cargoes sold that I don’t think ever get shipped,” he said by telephone.

U.S. Soy Exporters Say the Loss of Chinese Market Share May Be Permanent

The USSEC has targeted non-China buyers to pick up the slack, including Japan, Mexico, Myanmar, Nigeria, Pakistan, Taiwan and Thailand. While demand from other buyers has improved, the countries collectively cannot replace China, which brings in roughly two thirds of global soybean exports.

The renewed trade-war worries have pushed U.S. soybean prices down and raised prices in top global exporter Brazil.

“U.S. beans are competitive, and I would expect pretty good sales reported in the coming weeks,” Jim Sutter, chief executive officer of the USSEC, said on the call.

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