The US soyabean area this year is expected to drop 2M ha to total 34.3M ha as a result of US farmers planting less of the crop, Germany’s oil and protein plants association, UFOP, reported on 4 April.
Based on US Department of Agriculture (USDA) figures, UFOP said the decline was most likely the result of ongoing trade tensions between the USA and China.
“For months, China did not buy any soyabeans from the USA. The country now places sporadic orders but these are always followed by long pauses.”
Additionally, a 3% increase in harvest had forced producer prices down for soyabeans, which were around 7% lower compared with last season.
“Trade flows are not expected to return to normal while the conflict continues. Farmers are drawing the necessary conclusions and are likely to cut soyabean production in favour of other field crops,” UFOP said.
Many farmers also had huge stocks, with the USDA estimating stocks on farms at 34.6M tonnes as of 1 March, up 50% from the same time a year earlier.
China has purchased a total of 15M tonnes of US soyabeans since the 90-day truce between the two countries took effect on 1 January.
The trade war began in July 2018, when US President Donald Trump announced tariffs on various Chinese products, and China responded with retaliatory 25% tariffs on US products, including soyabeans. The USA then imposed 10% tariffs on US$200bn worth of Chinese imports on 24 September, which prompted China to impose 25% duties on a wide range of US food products including several edible oils.
On 1 December, the two countries reached a temporary truce, agreeing not to impose additional tariffs on each other’s goods.