- President Donald Trump said soy prices have increased.
- They fell to nearly a decade after its trade war with China began.
- China turned to South American countries to replace US soybeans.
- Stocks of soybeans are nearing record levels.
- Watch real-time trading soybeans here.,
President Donald Trump claims the US soya beans largely resisted his trade war with China. But tariffs lowered prices to lows that have not been observed since 2008.
“And soybeans are growing, and things are going up,” he said at a press conference in New York on Wednesday. “And we had very little resentment of what I did. In fact, the markets have grown, and farmers will make great progress. ”
In fact, soybean prices fell by more than 12%, because China placed a 25% import tax on pulses to get a response against the Trump administration. This country is the largest consumer of soybeans in the world, accounting for more than half of world imports in 2017.
“In the future, there is great concern in the future,” said Gary Schnittke, a farm management specialist and professor at the University of Illinois. "Because [soybean farmers] will see much lower prices as a result of tariffs. "
Also on Wednesday, Trump said that China started buying American soybeans again. But officials in Beijing are developing a strategy to minimize dependence on american soybeans since the beginning of the trade war, China has changed most of its demand for South America and left the United States, and now there is a record level of soybean reserves.
"At this stage of deepening trade stresses, it is unlikely that private traders in China will seek to buy American soybeans," say JPMorgan analysts in a recent study.
In July, the Trump administration announced $ 12 billion. US emergency assistance to farmers who are at risk of financial loss from their trade policies. Soy farmers are ready to get the most out of the controversial plan.
“Soy is not just some trifle in the background,” said Torsten Slok, chief international economist at Deutsche Bank.
“In fact, this is what is very important in general for what the agricultural sector is doing and in terms of where the income comes from. That is why we are very carefully observing whether soybean prices are rising. ”
According to analysts, without a visible goal and a trade war, analysts say that in the near future there is little chance of a recovery in soybean prices. Beijing canceled the high-level talks scheduled this week after another round of Trump import tariffs from China entered into force. And the longer the tariffs are, the harder it is to restore market share.
“Even in the best case, t. E. Ending a trade war, it will be difficult to fully restore the former degree of demand for soybean imports in China, in our opinion,” wrote JP Morgan