Brazil Dominates Chinese Soybean Market in Early 2025

According to trade sources, Chinese buyers have secured nearly all their soybean cargoes from Brazil for the first quarter of 2025. 2024 Brazil accounted for 54% of China’s first-quarter soybean imports, compared to 38% from the United States. China, which consumes over 60% of global soybean exports, has shifted almost entirely to Brazilian supplies.

“Chinese crushers are now booking Brazilian cargoes for February and March shipments,” said a trader in Singapore. “Both state-owned and private crushers are taking Brazilian beans. It’s a 100% shift to Brazil.”

Trade Tensions Loom Under Trump

Trump’s threats of imposing tariffs ranging from 10% to 60% on Chinese goods have raised fears of retaliatory duties on U.S. agricultural products. During Trump’s first term in 2018, similar tit-for-tat tariffs led China to reduce its reliance on American farm goods.

According to Chinese customs data, between January and November 2024, the U.S. share of China’s soybean imports dropped to 18%, down from 40% in 2016. Meanwhile, Brazil’s share surged to 74%, up from 46%.

Brazil’s Competitive Edge

Brazil’s early-year harvest dominates global soybean trade until U.S. supplies enter the market in August. However, Chinese importers have shifted to Brazilian soybeans earlier than usual this year, significantly impacting U.S. exports during their peak marketing season in January.

According to USDA estimates, the U.S. is now expected to end the 2024/25 marketing year in August with 10.34 million metric tons of soybean stocks, the highest level in five years.

The primary driver for this shift is Brazil’s price advantage. Brazilian soybeans are currently priced at $420 per ton (including cost and freight) to China for February shipments, compared to $451 per ton for U.S. cargoes from the Pacific Northwest. A record crop in Brazil, with favorable weather and a weaker Brazilian real, has significantly lowered production costs, making Brazilian soybeans highly attractive to Chinese buyers.

“Concerns over potential trade tensions, especially after Trump’s re-election, have led to increased soybean purchases from Brazil,” said Lin Guofa, senior analyst at Bric Agriculture Group. “Favorable weather and currency depreciation have further encouraged imports.”

Demand Outlook and Oversupply Challenges

Despite the competitive pricing, China’s soybean imports for Q1 2025 are expected to decline to 17.3-18.0 million metric tons, compared to 18.58 million tons during the same period in 2024. Analysts attribute this to an oversupply of imported soybeans in 2024, which reached a record 105.03 million metric tons.

“Everyone is now waiting for the new Brazilian crops to arrive,” said a Shanghai-based analyst, speaking anonymously due to media restrictions.

While private buyers are focusing on Brazilian soybeans, state stockpiler Sinograin continues to procure U.S. beans. These beans are valued for their higher oil content, which makes them ideal for stockpiling.

Outlook for U.S. Soybeans

The shift away from U.S. soybeans underscores the lasting impact of trade tensions on global agricultural markets. As Brazil consolidates its position as the top supplier to China, U.S. exporters face mounting challenges, mainly as Trump’s trade policies appear poised to resurface in 2025.

Source: Reuters 

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