US farmers face permanent loss of soybean market

US farmers face permanent loss of soybean market My Country
US farmers face permanent loss of soybean market My Country

US farmers face permanent loss of soybean market My Country

By Hu Weijia Source:Global Times

Thanks to the US-launched trade war, China is turning to Russia for soybean supplies. Some American farmers consider this to be a temporary plan to fill the gap left after China curtailed imports of US soybeans, but those people may be deeply disappointed by the result.

China attaches importance to long-term stable cooperation with Russia in soybean imports. Some Chinese companies have showed enthusiasm for growing soybeans in Russia that are then exported to China. JBA, a joint venture between companies including Joyvio Group and Heilongjiang Agriculture Co, has announced a plan involving 1 billion yuan ($142 million) to plant crops – including soybeans – in Russia.

Once Chinese companies develop soybean planting bases in Russia, the nation will offer a stable source of the crop for the Chinese market. US farmers face the risk of losing China’s soybean market forever, even if US President Donald Trump ends the trade war with China.

US soybeans are cheap on the world market, so some analysts forecast that Chinese importers will turn back to buying US soybeans if the two countries lift all the punitive tariffs put in place since the trade war began. However, Chinese investment is changing the outlook in this sector.

As China and Russia expand cooperation in fields such as agriculture, Russian soybeans will become more competitive in the Chinese market. The Russian Far East is adjacent to China’s northeastern provinces, which are themselves a major soybean producing area in China. Chinese soybean technology can help Russian farmers achieve higher average yields and meet the demand of the Chinese market.

China and Russia agreed in June to upgrade relations to a comprehensive strategic partnership of coordination for a new era. Russian President Vladimir Putin said his country is committed to deepening cooperation with China in a range of fields including agriculture, according to the Xinhua News Agency.

China and Russia have large potential for agricultural cooperation related to soybeans. Some statistics show that the area dedicated to soybean cultivation in Russia is just 2.5 million hectares, accounting for only about 3 percent of the country’s arable land. Russia has the potential to expand its soybean planting area.

In 2018, trade between China and Russia reached $107 billion, less than the amount between China and Malaysia. The potential of China-Russia trade is far from being fully exploited. Soybean purchases offer an opportunity for Beijing and Moscow to strengthen their economic ties.

A trade deal between China and the US now looks far off. Until any such agreement is formally signed, Chinese companies will keep investing in Russia’s agriculture sector. This will result in irreversible losses for US soybean farmers.

There is only a small window of time for Washington to help US farmers save their market share in China before Chinese companies finish reshuffling their supply chains by diversifying trading partners. Hopefully, Trump can seize the chance.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn

US farmers face permanent loss of soybean market My Country