US-China Trade Deal Leaves American Soybean Farmers in the Cold
The recent US-China agreement on trade relief has left American farmers disappointed as it does not include soybeans, their key export to China. According to the deal, both parties have agreed to provide a more favorable tariff regime for goods worth about $60 billion in mutual trade.
China plans to reduce tariffs on various U.S. agricultural products such as corn, wheat, sorghum, meat, dairy products, vegetable oils and meals, but soybeans are excluded from the list.
The new terms are expected to improve access to the Chinese market for about 30% of US exports to China, covering around 11% of annual US imports and more than 25% of exports. A separate working group will be created to discuss market access and regulatory issues further.
As a result of the agreement, November soybean futures in Chicago fell by 2.4% to $473.4/t on Monday, erasing all gains from the past month. Analysts expect pressure to increase over the next two weeks due to the acceleration of soybean harvest in the US and favorable rainfall before planting season in Brazil.