The United States is feeling the effect of cheaper Argentine soybeans. After Argentina suspended its export tax, China has reportedly purchased several cargoes of its soybeans, explains market advisor John Heinberg with Total Farm Marketing.
“The Argentine government decided to take their export taxes to zero,” he says. “That’s why we saw the big reaction in the market for soybeans. It just brings Argentina right back into competitiveness with the U.S. bushels. Unfortunately, we already saw China step into the market and buy a pile of Argentine soybeans on that tax break. Those were beans that I think our market was really hoping were going to come out of the United States.”
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According to the American Soybean Association, this week, the U.S. government was in negotiations to extend a $20 billion swap line to the Argentine government and potentially purchase the country’s foreign bonds. Almost immediately after the announcement from the U.S. Treasury, a reported 20 shiploads of Argentine soybeans were purchased by China after the Argentine government waived taxes on its soybean exports.
“U.S. soybean farmers have been clear for months: the administration needs to secure a trade deal with China,” says ASA President Caleb Ragland.
China is the world’s largest soybean customer and typically the U.S.’s top export market. The U.S. has made no sales to China in this new crop marketing year due to 20 percent retaliatory tariffs imposed by China in response to U.S. tariffs.
“This has allowed other exporters, Brazil and now Argentina, to capture our market at the direct expense of U.S. farmers,” Ragland says. “The frustration is overwhelming. U.S. soybean prices are falling, harvest is underway, and farmers read headlines not about securing a trade agreement with China, but that the U.S. government is extending $200 billion in economic support to Argentina while that country drops its soybean export taxes to sell 20 shiploads of Argentine soybeans to China in just two days.”
ASA is calling on President Trump and his negotiating team to prioritize securing an immediate deal on soybeans with China.
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