The US is about to lose its leading position in global soybean exports to South American countries in 2019 as China seeks new import sources under the impact of the escalating China-US trade war, industrial sources said.
It is estimated that Argentina, a major global soybean producer, will raise its soy exports to China from an average of 7-8 million tons in the past several years, up to 10-15 million tons in 2019, Nicolas Pawlusiak, a spokesperson with the Rosario Board of Trade (BCR), which is based in Santa Fe, Argentina, told the Global Times on Thursday.
The growth in soybean exports from South American countries is caused by the decline in US exports to China, Pawlusiak said.
"Total soybean production in Argentina in 2019 is expected to be more than 50 million tons, of which 15 million tons are for the export market, most of which will be sold to China. It's twice the average of the past five years," Pawlusiak said.
Zou Yesheng, deputy general manager of COFCO International Argentina estimated that China's soybean imports from Argentina will average 10-12 million tons in 2019. The US exported 30 million tons to China annually in past years.
Brazil, another major soybean producer, is predicted to produce a record high of 120-125 million tons in 2019.
Analysts said the spike in production from South America will challenge the US' leading position in global supply. And increase of US soybean inventories, combined with the changes in the global market will influence the pricing system.
Argentine President Mauricio Macri's government hoped to announce the soymeal-to-China agreement at the G20 meeting in Buenos Aires at the end of this month, Reuters reported on November 29.
There is no specific timetable yet for the deal to be signed between the two countries, several sources told the Global Times.
This year Argentina resumed soybean oil exports to China after three years, Pawlusiak said.
Pawlusiak said that he believes if trade tensions between China and the US keep escalating, South American soybean meal and soybean oil will also likely to see rising exports to China.