US-China soybean trade to resume: Beijing agrees to buy 25 mn tonnes for next 3 years; more nations will buy American soy, says Bessent – The Times of India

Soybean trade between the US and China is set to resume after months of halted purchases. Beijing had refused to purchase American soybean after the two nations got embroiled in tariff tensions.Now, China has agreed to buy 12 million metric tonnes from the United States in the ongoing season till January. However, this is still significantly lower than the 22.5 million tonnes purchased in the previous season.US treasury secretary Scott Bessent confirmed the development on Thursday, saying China has also committed to purchasing 25 million tonnes annually over the next three years under a broader trade agreement. The commitment was reached following talks between US President Donald Trump and Chinese President Xi Jinping in South Korea.The decline in Chinese purchases came as a hit for the US farmers who lost billions in sales. The deal would, hence, come as a return to normalcy with the top US soybean importer. Over the past five crop years, China’s annual purchases averaged 28.8 million tonnes from September to August, Reuters reported.“Our great soybean farmers, who the Chinese used as political pawns – that’s off the table, and they should prosper in the years to come,” Bessent said on Fox Business Network’s Mornings with Maria. He further added that the agreement negotiated in Malaysia over the weekend could be formally signed as early as next week.Alongside China’s commitments, Bessent said other Southeast Asian countries have agreed to buy an additional 19 million tonnes of US soybeans, though he did not specify the timeframe or which countries are involved. According to US Census Bureau data, other Asian importers typically purchase between 8 and 10 million tonnes annually.The commodity markets responded immediately. The most-active soybean contract on the Chicago Board of Trade erased earlier losses and finished 1.2% higher, settling at a 15-month peak of $11.07-3/4 per bushel. Export prices for US soybeans have surged by $20 to $30 per metric tonne this week, driven by expectations of renewed Chinese demand after the Trump–Xi meeting. Roughly 180,000 tonnes, three cargoes, were sold to state trader COFCO just before the summit.Relief among American farmersFarm groups have welcomed the breakthrough after the prolonged trade war slashed soy exports that were worth $24.5 billion last year. US farmers are nearing completion of what is expected to be the fifth-largest soybean harvest on record, but weak Chinese demand and rising costs for fertiliser, seed, labour and machinery have squeezed farm incomes.“This is a meaningful step forward to reestablishing a stable, long-term trading relationship that delivers results for farm families and future generations,” American Soybean Association President and Kentucky farmer Caleb Ragland told Reuters.The breakthrough comes after Trump secured agricultural trade understandings with other Asian economies. American Farm Bureau Federation President Zippy Duvall said, “Expanding markets and restoring purchases by China will provide some certainty for farmers who are struggling just to hold on.”China diversifies soybean purchasesTrump announced on social media after the meeting with Xi that China had authorised purchases of “massive amounts” of soybeans, sorghum and other US farm products. US Agriculture Secretary Brooke Rollins later praised Trump’s comment in a post on X.However, analysts say the arrangement largely resets the trade relationship to previous levels rather than marking an expansion. Even Rogers Pay, director at Beijing-based Trivium China, said the agreement “effectively constituted a return to business as usual”, adding, “It targets a level of trade that has been pretty consistent with the past few years.”Further details will determine whether private Chinese importers return to the US market. Johnny Xiang, founder of Beijing-based AgRadar Consulting, said commercial buyers are waiting to see if soybean tariffs will be lowered from 20% to 10%, or removed entirely.“If the tariff is not completely lifted, commercial buyers will have little incentive to purchase US soybeans,” he told Reuters.China, the world’s largest soybean importer, used its massive demand as leverage during the earlier Trump-era trade war. Facing tariffs of 23%, Chinese buyers shifted towards South American suppliers. Since then, China has intentionally diversified its import sources. Customs data shows that in 2024, only 20% of China’s soybean imports came from the United States, a steep drop from 41% in 2016.