One year after China did not import even one ounce of US soybeans as the trade feud was escalating at the end of 2018, in November 2019, China - which has found itself roiled by soaring food prices - saw its imports of US soybeans surge to the highest in 20 months after more American cargoes cleared customs ahead of the alleged signing of the Phase One trade deal in January.
According to data from China's Customs Administration, China’s inbound shipments from the U.S. more than doubled to 2.6 million tons, the highest since March 2018, and up from about 1.1 million tons in October. As noted above, in November of 2018 - when the trade war between the two nations was escalating rapidly - China imported no U.S. soybeans.
As Bloomberg notes, citing USDA data, China’s total commitments in the current marketing year hit 10.5 million tons, compared with just 2 million tons the previous year.
That said, the surge in US soybean imports was not some trade war concession aimed at the US because as US imports jumped, so did China's imports from its top Latin American markets: specifically, in November, China bought bought 3.9 million tons of soybeans from Brazil, Beijing's largest supplier, up from 3.8 million tons in October and 5.1 million tons in November last year; imports from Argentina also rose from 959,936 tons in October to 1.4 million tons, and up from a tiny 36,119 tons in November last year.
According to China's National Grain and Oils Information Center, December imports may climb to about 9 million tons following more shipments from U.S., which could ease supply shortages at some crushers.
And while China is unlikely to order less soybean from either Brazil or Argentina any time soon as the two nations have emerged as the two key supply chain alternatives to the US, where any trade goodwill may be undone with stroke of a tweet, Bloomberg notes that Chinese companies are likely to continue purchasing American soybeans especially if the two countries sign the partial trade deal in early January, in line with the market's expectations.
There is also China's desperation to repopulate its decimated pig population and to do that, Beijing needs access to all the soybeans it can get. It explains why China has been issuing regular tariff waivers (which cover 30% of the retaliatory tariffs on US soybeans) for domestic firms to buy U.S. soybeans.
That said, China was quick to pretend like the surge in US soybean purchases was in fact some concession, and shortly after the news of the import jump hit, China's infamous twitter troll, Global Times editor Hu Xijin, tweeted "congrats to US farmers" adding a tacit threat that US farmers should "prod" the US government to sign the Phase One deal if they want China's vital goodwill to continue, to wit: "meanwhile please prod the US government, making sure the two countries can sign phase one deal smoothly and the next trade talks continue to make progress. This is vital to stabilize China’s purchase of US farm products."
Congrats to US farmers. Meanwhile please prod the US government, making sure the two countries can sign phase one deal smoothly and the next trade talks continue to make progress. This is vital to stabilize China’s purchase of US farm products. https://t.co/cPycSBlNSQ— Hu Xijin 胡锡进 (@HuXijin_GT) December 25, 2019
What he really meant was that China, where we will soon need a bigger chart to show soaring food hyperinflation (and middle-class anger at surging good prices) is desperate to buy US agricultural products to keep prices lower, and with every passing months, Trump's negotiating leverage rises in lockstep with Chinese food inflation.
He also really meant "congrats to Chinese farmers" for procuring the soybeans they so urgently need if they are to have any hope of restocking China's most popular protein: pork.