Soybean exports from Brazil to China in January may fall to around half of January 2019’s levels, data from shipping company Cargonave showed, a sign that the imminent signing of a trade deal between China and the United States weighed on business.
According to shipping schedules through Jan. 31, soy cargos headed from Brazilian ports to China totaled about 800,000 tonnes, down from about 1.4 million tonnes lined up for shipping to the same destination in January of last year.
There were 21 vessels scheduled to ship soybeans to the Asian country in January 2019 compared with 12 this month, the data showed.
According to analysts, the big difference reflects the continued effects of the trade war, which caused a surge in Brazilian soybean exports to a record of some 83 million tonnes in 2018.
“January of last year was atypical because we had an export record in 2018, and the market was still very heated due the Chinese demand,” said independent agribusiness consultant Andrea Cordeiro
“At that point (January 2019), the impression was the trade dispute was going to last,” she said.
In the event the United States and China do sign Phase 1 of the trade agreement next week, the analysts see the possibility of “washouts,” which are effectively contract cancellations.
“Now that the U.S. and China moved closer to an agreement, China’s purchases of Brazil’s soy will likely be reduced with a view to buy it from the U.S.,” said Gabriel Viana, Safras & Mercado.