CHICAGO (DTN) — Even though a Chinese trade delegation is visiting Chicago for the annual U.S. Soy Global Trade Exchange meeting in Chicago, there remains uncertainty on how much soy will be traded between the U.S. and China this year.
Jim Sutter, CEO of the U.S. Soybean Export Council (USSEC), said that China is still taking about 500,000 metric tons of U.S. soybeans from the “good will” purchases they made earlier in the year. He said the purchases will soon be fulfilled, but then it is uncertain if and when there will be any more purchases.
For this year, “Chinese purchases will be one-third of what they were last year, a result of the ongoing trade war with the U.S,” Sutter told a news conference Wednesday.
This week’s meeting, being held Aug. 20-22 in Chicago, has more than 800 soy and grain industry leaders, buyers and suppliers from all over the world. They’re attending the seventh annual U.S. Soy Global Trade Exchange and the 16th annual Specialty Grains Conference and Trade Show.
The jointly held USSEC and Specialty Soya and Grains Alliance (SSGA) meeting — with attendees from 53 countries, including the China trade delegation — will help USSEC with some of its objectives.
Sutter pointed out that USSEC is focusing on trying to increase exports to other destinations.
“We are trying to grow our market share in existing markets and trying to build longer-term new demand in emerging markets. These are some key strategic efforts we have under way.” Sutter said.
“This event is one of our largest events of the year, and it allows us to bring together buyers and sellers to highlight the U.S. as a great supplier of choice,” he said.
ONGOING TRADE WAR
While the U.S. looks to build up export sales to other countries, the ongoing trade war with China was the topic on everyone’s mind.
At a morning news conference, various representatives of USSEC and SSGA talked about the challenges facing the U.S. soybeans farmer with the current trade war between China and the U.S., along with the difficult planting and growing season faced by U.S. soybean farmers.
SSGA Chairman Curt Petrich, of HCI International Inc., said that it was a “perfect storm” to hit U.S. exports to China, because of the trade war tariff issues and the African swine fever that has wiped out a great deal of China’s hogs.
“We likely would have seen a slowdown in demand due to ASF even if there hadn’t been a trade war,” said Petrich.
REPLACE LOST DEMAND
Sutter said that when the trade war with China started a year ago, USSEC established a “what it takes” initiative, with the goal of that initiative being to fully replace the lost demand for U.S. soybeans to existing markets such as Europe, Mexico, Japan, Korea and other current customers.
“We are also looking for new opportunities in Pakistan, Egypt and Bangladesh and other markets,” he added.
Sutter said that while demand has picked up, unfortunately, it has not been enough to fully replace the lost demand from China.
“I see the current trade situation as a temporary phenomenon, but we will continue to persevere and U.S. soybean farmers will keep producing a high quality, sustainable crop,” he said.