As negotiations to end the U.S.-China trade war drag on, American soybean farmers are doubling down on promoting shipments to buyers elsewhere in Asia that stepped up when the world’s largest importer all but halted purchases over a year ago.
The U.S. soy industry hosted importers from countries including Pakistan, South Korea and India who traveled through North and South Dakota this week and also visited ports in the Pacific Northwest to learn more about the American supply chain. The trip was made possible with funds from last year’s $12 billion aid package from the Trump administration to mitigate the impact from the trade war. So far, no deals have been inked during the tour.
In 2018, U.S. soy exports tumbled about 16% after China slapped tariffs on American supplies amid the tit-for-tat trade dispute between the world’s two biggest economies. Increased shipments of the oilseed to other buyers, including record-large shipments to countries such as Pakistan, helped limit the fallout. However, prices are still well-below their pre-trade war levels.
For Monte Peterson, a director on the American Soybean Association who grows the crop in Valley City, North Dakota, local soybean prices are at about $7.36 a bushel, below his cost of production. Meanwhile, ports in the PNW have excess capacity to ship supplies, in what is often the fastest route from the U.S. to Asia. Peterson welcomed a contingent of Asian buyers to his farm as part the trade tour.
“When the tariffs came on, the PNW exports shut down,” Peterson said by phone. “China is not going to be utilizing shipments through there like they have in the past. We have other customers who can take advantage of that.”
Paul Burke, the senior director of soy marketing for the U.S. Soybean Export Council, has said that America may never regain the lucrative Chinese market that accounts for roughly two-thirds of global exports.
“Literally, we need 100% share in every non-China market if we want to move the market and deplete stocks,” Burke said by phone.
The trade delegation also included visitors from Bangladesh and Sri Lanka.
“We’re really trying to reconnect a lot of buyers in Asia with the concept of sourcing from the PNW,” Burke said.