Ag Trade War: Keeping Score

China has increased its agricultural imports this year despite largely snubbing products from the United States. Calculations using China's customs statistics indicate that China imported $10.3 billion of agricultural and food products during October 2018, up from $9.3 billion in October last year, a $1.6-billion year-on-year increase. China's imports of ag products from the United States during October were $866 million less than a year earlier. The decline in imports from the U.S. will become even more prominent during November-January if China is able to continue avoiding imports of U.S. soybeans during those months--usually the peak season for U.S. soybean supplies.

Brazil has played a dominant role in keeping China supplied with soybeans. China's October ag imports from Brazil doubled from a year ago. The $1.65-billion year-on-year boost in purchases from Brazil was also twice as much as the year-on-year drop in imports from the United States. Brazil was, by far, the largest supplier of China's imported agricultural products. China imported more from a number of other countries, but none came near to matching the increase in purchases from Brazil.

China agricultural* imports, October 2018
Country	October 2018	Year -on-year change
	$1,000	$1,000
Brazil	3,330,560	1,655,514
United States	542,310	-866,344
EU	1,297,208	176,444
Australia	646,770	48,743
Canada	620,172	190,609
Indonesia	491,823	68,531
New Zealand	455,820	60,122
Vietnam	438,840	-40,376
Thailand	390,994	108,673
Russia	324,357	152,814
India	203,602	35,116
Malaysia	195,958	-56,141
Argentina	172,853	-221,507
Chile	127,365	15,013
Pakistan	90,317	-37,563
Ukraine	21,654	-47,032
Others	1,537,522	349,017
Total	10,888,125	1,591,632
*Agricultural = Harmonized System 01-24, 41, 52

China's top agricultural imports during October
Category	Oct 2017	Oct 2018	Change
		Million dollars
Total HS 01-24,41,52	9,296	10,888	1,592
12 Oilseeds, alfalfa	2,706	3,376	670
03 Fish and shellfish	719	1,086	367
02 Meat and offal	734	846	112
52 Cotton	699	694	-6
15 Fats and oils	676	681	5
19 Prep. cereals, milk; pastry	540	654	114
08 Fruit and nuts	355	488	133
22 Beverages, spirits	413	477	64
41 Hides and skins	409	360	-49
04 Dairy and honey	349	356	7
21 Misc. ed. preparations	262	334	71
23 Food ind. Waste and feeds	218	311	93
10 Cereal grains	470	300	-171

The share of China's agricultural imports obtained from the United States shrank from about one-fourth in January and February this year to just 5 percent in October. There was a noticeable drop in U.S. share in July when China's retaliatory tariffs took effect. The drop occurred in May for meats because meat tariffs were introduced in April and boosted again in July. The U.S. share of China's oilseed and meat imports was down to 2 percent in October. China's grain imports from all countries have dropped, and imports of U.S. grain were negligible in August and October.

Share of China's agricultural imports that came from the United States, 2018
Month	All agricultural	Oilseeds	Fish & shellfish	Meat	Fruit & nuts	Cotton	Grains
	Percent
Jan	26.3	62.0	11.9	6.0	13.6	17.0	21.7
Feb	25.3	53.2	15.1	8.3	3.9	27.7	33.2
Mar	21.9	47.9	14.5	12.6	7.9	21.4	26.6
Apr	17.1	32.5	13.7	7.6	5.5	18.9	20.5
May	9.6	6.2	12.1	5.4	5.9	17.8	20.2
Jun	8.7	7.7	12.6	4.5	9.9	11.0	21.6
Jul	6.0	4.8	6.6	3.9	10.6	6.1	5.9
Aug	5.0	3.6	7.8	2.7	4.1	4.9	0.3
Sep	5.1	2.6	12.9	2.0	4.1	4.1	3.2
Oct	5.0	1.9	10.1	1.9	7.9	4.2	0.2

Brazil has almost single-handedly kept China supplied with soybeans. China imported 6.9 mmt of soybeans during October, ahead of the pace a year ago. Brazil remains the predominant supplier of China's soybeans despite nearing the end of its marketing season. Brazil supplied 85 percent of China's oilseed imports during October and Oilseeds accounted for 85 percent of China's ag imports from Brazil. Yet the prices China paid for soybeans were up only slightly. Brazil's customs data shows that the average prices of soybeans exported to China have been relatively flat, at about $400 per metric ton. China's import price reported by its customs data was up slightly, to $435/mt during October. U.S. soybean export prices calculated from U.S. customs data fell about 12 percent below the average Brazilian export price.