[Source / Observer Network, Wang Yi] In the trade war initiated by the US against China, American soybean growers have seen their lost Chinese market vanish, leaving them disheartened, while Brazil's soybean producing regions are filled with cheers.
According to a May 6 report by The Washington Post, US President Trump reignited the trade war with China, and Brazilian farmers have reasons to celebrate: they are ready for a bountiful harvest. At an agricultural exhibition in a local soybean-producing area, Brazilian bean farmers were in high spirits, sipping the local specialty soda Guarana, contrasting sharply with the panic felt by American farmers.
"The conflict initiated by the US will ultimately benefit Brazil," said 50-year-old Brazilian soybean farmer Wesley Moacir Rosa.
José Francisco Paludo, who owns 741 acres (approximately 4504 mu) of soybean plantations, expressed excitement at Trump's return. While chewing on cheese, he said, "I am becoming optimistic; things will improve."
The report stated that China is the world's largest soybean market, importing over 100 million tons annually. For many years, this has been a boon for both Brazilian and American farmers, as the two countries together met most of China's soybean demand, making soybeans the largest agricultural export product for both nations.
According to data released by China's General Administration of Customs, China's soybean imports exceeded 100 million tons in 2024, reaching a historical peak. Among these, 22.13 million tons were imported from the United States and 74.65 million tons from Brazil. Since Trump first provoked a trade war with China in 2018, Sino-US trade frictions have escalated continuously, prompting China to turn to Brazil for soybean procurement to ensure food security. Brazil has gradually replaced the United States as China's top supplier of soybeans.
Brazilian workers harvesting soybeans in Orizona, Goiás state. Visual China
This year, Brazil is expected to achieve a record soybean harvest, further consolidating its dominant position in the Chinese market. According to a report by Yu Yuan Tan Tian on April 28, multiple Brazilian soybean ships have docked at Ningbo Zhoushan Port's Laotangshan operation zone in China. In April, the number of Brazilian soybean ships docking increased by about 48% year-on-year, and the unloading volume increased by about 32%.
On April 17 local time, the 15th BRICS Agriculture Ministers' Meeting was held in Brasília. Earlier, the South China Morning Post quoted Brazilian officials as saying that the focus of talks between the Chinese delegation and Brazil would be on the export of Brazilian agricultural products such as soybeans and beef to China, as well as "how to fill the gap left by US tariffs."
In a report on April 17, Brazil's largest financial magazine EXAME estimated that as the trade conflict between China and the United States intensifies, Brazil's soybean exports to China this year may increase from approximately 75 million tons in 2024 to around 90 million tons. If this more positive scenario becomes a reality, then based on exchange rates and shipping volumes, Brazil's total income from soybean exports to China this year could increase by $7 billion, reaching $40 billion.
A consulting company Datagro stated in a report that China's retaliatory tariffs on the US have damaged US soybean exports, but also enhanced the competitiveness of Brazilian products in the Chinese market. Although Argentina may absorb some of China's demand, "from the perspective of the Brazilian market, the outlook for exports is promising."
At the same time, The Washington Post pointed out that the remaining market share of US soybeans in China is evaporating. According to USDA data, from April 17 to 24, China only purchased 5,446 tons of US soybeans, a sharp decrease compared to the 72,800 tons purchased in the first week of April.
The New York Times reported on April 20 that this year's situation reminded people of the trade war initiated by the Trump administration against China during its first term. Data shows that from just before the outbreak of the trade war in 2017 to 2024, China's annual imports of Brazilian soybeans increased by 35%, while the import volume of US soybeans decreased by 14%.
"This situation has not reversed and still exists," said André Nassar, chairman of the Brazilian Vegetable Oil Industries Association, which represents Brazil's largest soybean producers. "The same situation will happen again; Brazilian export products will once again replace US export products."
The report noted that the Trump administration provided $2.3 billion in government aid to farmers during the last trade war, but it did not fully compensate for all the losses incurred by the farmers. It remains unclear whether the current US government will provide similar assistance. Moreover, in the past decade, China has invested heavily in warehouses, railways, ports, and other infrastructure in Brazil, providing greater convenience for Brazilian soybeans to reach China.
America is losing not only the Chinese market
Scott Gerlt, chief economist of the American Soybean Association, said that one in every three or four rows of soybeans grown in the US is usually purchased by China, and American farmers are heavily dependent on trade with China. However, last month, China imposed retaliatory tariffs in response to the Trump administration's tariffs, effectively cutting off American farmers' connection with the world's second-largest economy.
"The loss of 30% of demand in a short period of time is unimaginable," Gerlt pointed out. Some American farmers are already operating at a loss, under pressure from operational costs and low international soybean prices, leading them to question whether they can continue production. "Everyone is very panicked now, and farmers are under great pressure."
Jim Sutter, CEO of the US Soybean Export Council, said that many producers still hope Trump will eventually find a mutually beneficial solution, but growing uncertainty and memories of the previous trade war are increasingly testing their optimism.
"People will ask, who are the winners and who are the losers?" Sutter feels that the winners are Brazilian farmers, and the losers are US soybean growers.
Bloomberg cited data from provider Epiq Bankruptcy Analytics, stating that so far this year, 88 family farms or corporate farms have filed for bankruptcy, higher than 50 during the same period in 2024. If the US continues to maintain its tariff policies, this number is expected to rise further.
The Washington Post believes that as the global economy gradually adapts to the protracted dispute between China and the US, the global soybean trade market can quickly avoid disruptions and readjust. What appears to be temporary changes will evolve into permanent "reshuffling."
The report noted that soybeans generally grow in colder climates, but during the period from 1964 to 1985, Brazilian agricultural scientists developed new varieties of soybeans that could thrive in the country's soil, pioneering the "tropicalization" of soybeans. Since then, soybean cultivation has moved from the colder southern regions to the north, becoming an important economic and cultural force in Brazil's vast inland areas.
Since then, Brazilian soybeans have been favored by other countries, and Trump's government's trade war launched in April this year will lead more countries to choose agricultural products from South American countries like Brazil, and US agriculture is expected to lose more export markets.
Professor Marcos Jank of Insper Business School in São Paulo said that as negotiations between Mercosur and the EU progress, South American countries may also increase shipments to Europe.
Ivo Sarjanovic, former soybean trader at Cargill and professor at the University of Buenos Aires in Argentina, pointed out that if the tariff chaos persists until the fourth quarter of this year, which is the US harvest season, and the US is still unable to export, Chinese and European buyers will continue to purchase from South America.
Beatriz Costa, organizer of Brazilian agricultural gatherings, thanked Trump. She said that the trade war "has indeed benefited our agriculture," and "we are full of hope."
This article is an exclusive contribution from Observer Network and cannot be reprinted without permission.
Original source: https://www.toutiao.com/article/7501548458835329574/
Disclaimer: The views expressed in this article are solely those of the author. Welcome to express your attitude by clicking the [Upvote/Downvote] buttons below.