US-China Trade War Creates Windfall for Rivals of US Soy in China

The giant blow dealt to U.S. farmers by China’s retaliatory tariffs on American soybeans is shaping up to be the biggest windfall yet for palm oil producers half a world away, reports Bloomberg News.  China is likely to import a record 6.7 million tons of palm oil in the year from October, according to the China National Grain and Oils Information Center.  That’s because rival soybean oil prices are surging as supplies of beans, used to produce animal feed, shrink due to the trade war and African swine fever.  

Lower demand for soybean meal, used in livestock feed, means fewer beans are crushed and less oil produced.  The spread between prices of soybean oil and palm oil, which is mostly produced in Asia, has soared as soyoil hovers near the highest in two years.  Meanwhile, China’s soybean imports fell 11% in the first seven months of this year compared to last year.
 
 China’s palm oil consumption rose more than 20% in the first seven months of 2019 due to its price advantage, according to the Center.  Imports in the current year are estimated at 6.5 million tons, already up from 5.3 million tons a year earlier, the Center said.  Indonesia, the world’s biggest producer of the oil, saw June exports to China jump more than 30% from a year earlier to 435,540 tons.