The Trump administration’s announcement to delay some tariffs on Chinese imports has rekindled hopes for a trade truce between the two countries, but for American soybean farmers, things are getting dire as they struggle to find alternative markets for their crops.
The US Department of Agriculture on Monday predicted that soybean production in 2019 will fall by 20 percent, yet farmers are expected to be left with a surplus of 755 million bushels in the absence of buyers.
China has sanctioned its private sector from buying soybean from the US because of the ongoing trade war and substantially raised its imports from Brazil, which is now its largest exporter.
Farmers facing an oversupply problem are aggressively chasing importers in counties like India and Bangladesh where “there is a large population, low per-capita protein consumption, and improving economic conditions.”
“We think those are the markets that are going to really become future drivers of demand for global soybeans and certainly US soybeans,” says a statement from the US Soybean Export Council.
Experts suggest Bangladesh with its growing demand for soybean will be a key market and its importers will benefit from this surplus as they can negotiate a better price.
A former official at the Bangladesh embassy in Washington told the Bangla Tribune that the government has been actively exploring the possibilities.
“A few delegations of Bangladeshi importers have come to the US and the government is facilitating those talks,” he said, adding, "we will benefit both from soybean and cotton prices."
The official said the benefits from this trade war in the short-run are obvious, but it may not be the same in the long run.
“When two economic giants are fighting, the ripple effects will be eventually felt by the others too,” he said.
Farmers form an important support base for President Trump and the administration would like to resolve the disputes with China at the earliest so that it doesn’t turn into a deciding factor in the 2020 presidential elections.
As the trade war grinds on, more and more farmers are facing rising debts and bankruptcies. The administration has announced subsidies but that may not prove to be enough.
Experts believe China may use this as a strategy in the trade negotiations and delay things until the results of the next elections.
On Tuesday, President Trump tweeted: “As usual, China said they were going to be buying “big” from our great American Farmers. So far they have not done what they said. Maybe this will be different!”.
The same day the Office of US Trade Representative announced that the impending 10% tariffs on $300 billion worth of Chinese imports targeted by President Trump in the trade war will be delayed from Sept. 1 to Dec. 15 for certain products.
China expert Bill Bishop commented on Twitter saying: "Remarkable cave by Trump on his tariff threat from early August. The message to Beijing is Trump can’t hold firm because of worries voters may get unhappy with more expensive holiday goods. So why would Beijing make concessions?"
The next round of trade talks between the two countries is expected in the next two weeks, according to the Chinese Ministry of Commerce.
But when it comes to soybeans, the prediction is that Chinese importers are not coming to the US market anytime soon.