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October 29 2018

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10 The Journal of Commerce | October 29 2018 Cover Story www.joc.com executive director of the Agriculture Transportation Coalition. The Trump administration so far has imposed $250 billion in duties on imports from China. It announced additional tari hikes of 25 percent to take e ect Jan. 1. China retaliated with its own tari s on imports from the US, and agricultural products are taking a major hit. Because China usually waits until the e ective date of the US tari s before imposing its own duties, farmers are uncertain what to expect come Jan. 1. It is certain, though, that they can't fi nd replacement markets in less than three months. "Agriculture can't pivot on a dime," Steenhoek said. US soybeans to China plummet China in July imposed a 25 percent tari on US soybeans, which last year totaled $12.4 billion in value. Soybeans move mostly in bulk, although about 10 percent are shipped in containers. Total soybean exports through July were down 4.8 percent, but they plunged 58.9 percent to China, down to 2,316 TEU, according to PIERS, a sis- ter product of The Journal of Commerce within IHS Markit. The tari war took the steam out of what started as a positive year for soybean exports. A drought in Argentina reduced that country's export crop and boosted soybean prices. "Earlier this year, we were bullish on the market for US soy- beans. We saw a signifi cant price increase in early 2108," Steenhoek said. Soybean prices declined from a high of $10.71 a bushel in March to $8.62 in late September. South American soybeans are harvested early in the year. Since Brazil and Argentina are forecast to have normal crops in early 2019, US producers will face sti competition from them. In fact, they will not only lose market share in China, but a shortage of storage capacity at home will compromise soybean farmers' ability to store their 2018 crop until market conditions improve. US EXPORTS OF containerized soy- beans — specialty crops grown in the upper Midwest such as peas and lentils — and California produce including fruits, nuts, and wine are declining because of due the trade war between the Trump administration and China. Soybean exports have slumped nearly 60 percent, and the long-term impact may be even more damaging as China shifts its sourcing to other producing countries. On the domestic front, agricul- tural exporters are facing operation- al challenges as marine terminals, clogged with imports that were shipped early to get ahead of the tari s, reduce free storage time, re- sulting in an increase in demurrage charges. "The short term is bad, but it's actually the long term that's more of a concern," said Mike Steen- hoek, executive director of the Soy Transportation Coalition. Brazil and Argentina have emerged as serious challengers to the once-dominant US position as the world's top sup- plier of soybeans, and the tari war with China is helping to fuel growth in their exports, he said. Agricultural exporters have learned that it takes years to build relationships and trust with overseas buyers, but events such as labor issues, or transportation capacity disruptions that threaten the reliability of US exports or boost the price of US agri- cultural products push buying nations to look for new trading partners. "If the price is too high, the customer has options," said Peter Friedmann, US-China trade war devastates potential for ag exports amid shipping challenges By Bill Mongelluzzo "The short term is bad, but it's actually the long term that's more of a concern."

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