The trade war between Washington and Beijing has had a major impact on the Susquehanna Valley agricultural space over the past two years with the latest US department of agriculture figures shining a light on the difficulties faced by farmers during the dispute.
Robert Johansson, the chief economist of the USDA said on Thursday that close to 25 million tonnes of US soybeans will go unsold in 2019, as a direct consequence of the trade war.
“The record-high stocks in the US due to the trade situation will take several years to unwind, which will weigh on US prices going forward even with potential China purchase agreements,” Johansson said in prepared remarks.
China was, until 2017, the largest buyer of US soybeans but has now slipped to fifth, according to the USDA, with a 6% drop in agricultural exports from the US to China last year.
The impact of the trade conflict was plain to see in the results of major agricultural trader Bunge, which bet big on Brazilian soybeans in light of the trade war’s impact on US exports.
The company saw a $125 million loss related to a decline in Brazilian soybean prices in the fourth quarter of 2018, and blamed “Factors related to China trade and demand,” for the loss.