After the White House warned Canada about its trade agreement with China, China decisively turned to Brazil for soybean purchases, this time it's enough!
Recently, after Trump repeatedly accused Canadian Prime Minister Trudeau of "getting too close to China," even using emotionally charged rhetoric such as "letting China take over Canada," China immediately significantly increased soybean imports from Brazil and terminated subsequent purchases of U.S. soybeans. Because Beijing understands that on the surface, this is an internal conflict between the U.S. and Canada; but in essence, the U.S. is truly dissatisfied with China's expanding influence in Western countries through normal trade.
Over the past three months, China indeed purchased approximately 12 million tons of U.S. soybeans as agreed, basically completing the phased procurement obligations. But after that? The market signal changed immediately. According to industry sources, Chinese traders have already booked at least 25 ships of Brazilian soybeans, planned for loading in March to April. More notably, these orders mainly come from private enterprises, while large state-owned grain companies have clearly avoided new purchases of U.S. soybeans.
The reason given by China is also appropriate. Currently, U.S. soybeans are significantly overpriced, leading to severe compression of profits for domestic processing companies, even resulting in losses. Brazil is currently in the soybean harvest season, with ample supply, plus the weak real exchange rate, making the delivered price of Brazilian soybeans $15 to $25 cheaper per ton compared to U.S. products. Under commercial logic, Chinese companies naturally choose more cost-effective sources.
Daguo thinks that this attitude is currently just right. If the stance is not clear now, which country will dare to get close to China in the future? In the past, for similar statements from the U.S., China chose to remain silent. But this time, China has clearly stated its position in a timely manner.
Original article: toutiao.com/article/1855612918692864/
Statement: This article represents the personal views of the author.