Dim Sums: Agricultural Markets in China

China has opened its market to Brazilian distillers dried grains (DDG), a co-product of distilling fuel ethanol from corn that is a cost-efficient ingredient in animal feed. This will further enhance Brazil's dominance as a supplier of China's agricultural imports. China was once a big market for U.S. DDG, but those sales were diverted to other countries after China hit them with steep duties. Exports of Brazilian DDGs to China are expected to grow at a rapid pace. Brazil's corn-based ethanol production has been growing rapidly, and the Brazilian industry has been eager to gain access to China's market for its DDG coproducts.  According to S&P Global  Brazil's industry has been working hard to gain access to China's market. A Brazilian official told S&P Global, "[W]e continue to push forward with a major goal: opening up the Chinese market, ensuring even more sustainability for this sector." An estimate circulated in news media  forecasts that ...

China has agreed to open its market to Brazilian distillers grains and peanut meal with a sanitary and phytosanitary protocol between China's General Administration of Customs and Brazil's Ministry of Agriculture and Livestock announced today. Distillers grains produced from Brazilian corn and meal produced from Brazilian peanuts that meet requirements specified in the agreement can be imported to China as of the date of the announcement.  Both products are used as ingredients in livestock feed.  Distillers grains are co-products of corn ethanol production, including distillers dried grains (DDG) and distillers dried grain with solubles (DDGS). Brazil produced an estimated 4.2 million metric tons of distillers grains in 2024. China was the largest export market for U.S. DDGS with 6.5 million metric tons exported in 2015. Exports were redirected to other markets after China assessed antidumping and countervailing duties on U.S. DDGS in 2016. In 2024 the United States exported ...

Reports of serious drought and pictures of parched fields have circulated on China's internet over the past two months. While Chinese officials acknowledge drought impacts, they insist the wheat crop now being harvested will be normal. We'll have to wait for market prices and imports to reveal whether drought has meaningful impact on China's supply of wheat--the main crop harvested during the summer months. An April article on Chinese social media observed that many reports of serious drought bubbling up around the country conflicted with the agriculture ministry's pronouncement that a "strong foundation had been laid" for a bumper harvest of summer-harvested crops. At the same time, that article also observed that posts by online influencers in China may not be credible either since they have incentive to exaggerate drought problems to attract attention. Whom to believe? Will China resume large imports of wheat after cutting imports sharply last year?  In ea...

Customs data show that China's April 2025 soybean imports were 6.08 million metric tons (mmt), down 29 percent from a year ago and the lowest April volume in years. This follows a March import volume of just 3.5 million metric tons. The low volumes reflect stringent customs inspections that slowed unloading of vessels already at Chinese ports.  China customs administration data The year-on-year decline in soybean imports occurred for both U.S. and Brazilian soybeans. Brazil typically becomes the dominant supplier in April. Customs data showed 4.6 mmt of Brazilian soybean imports and 1.38 mmt of U.S. soybean imports during April 2025. With the shift to Brazilian soybeans inspections have sped up this month and soybean crushers have ramped up operations. Soybean meal prices have dropped from near RMB 4000 in late April to just above RMB 3000 this week. Some feed mills are cutting feed prices due to the reduced cost of soybean meal. Soybean imports are expected to rebound to 12-t...

For decades Chinese leaders have been clamoring to "diversify" imports of agricultural products to reduce reliance on the United States. Having experienced the trade war with China 7 years ago, U.S. commodity producers have also declared their eagerness to diversify their export markets. Both diversifications are tough going because Brazil is the only real alternative supplier with capacity to supply China's gargantuan import needs. Likewise, alternative markets are not large enough to absorb the volume of U.S. soybeans sold to China.  China has been importing enormous quantities of Brazilian soybeans. In calendar year 2024 China boosted its imports of Brazilian soybeans to nearly 75 mmt--over 70% of the total. China imported only 22 million metric tons (mmt) of soybeans from the U.S. last year, but it's hard to see how those beans could be replaced. No other country shows signs of sustained growth as a soybean supplier to China. Imports from Argentina have been up an...

China says it is prepared to decouple from the U.S. in agricultural trade as it "diversifies" its trading partners, but this “opportunity” comes with some “risks.” On April 23, a bombastic Chinese news article cited purchases of 40 cargoes of Brazilian soybeans to prove that “ Americans Need to Know: Chinese People are Really Not Afraid of Decoupling from the United States .” The article asserted that the United States would be harmed more than China by decoupling and insisted that American farmers are “desperate” and “the public is panicking.” On April 13 " Chinese Soybeans Take the Lead in Decoupling and Supply Chain Reconstruction Under Trade Friction " announced that China is ready for "complete decoupling." This article also boasted that China is expanding domestic soybean production and claimed that Brazil is a "safer and more friendly partner" with cheaper soybeans that purportedly have a higher oil and protein content and fewer impuri...

China's April soybean imports totaled 6.08 million metric tons (mmt), according to customs data. While this volume was 2.5 mmt higher than the previous month, Chinese market participants had been expecting 8.5 million metric tons after large purchases from Brazil  according to analysis by China's Soybean meal forum . This was the lowest April import volume in the last 10 years. Customs clearance of soybeans has been slowed by border inspections. It is estimated that 2.4 mmt of soybeans arriving at Chinese ports are still stuck in customs clearance. With tight supplies of soybeans many processing plants are idle. Trucks are reportedly lined up waiting for soybean meal supplies they can deliver to feed mills.  Earlier this week Chinese authorities announced they had lifted bans on soybean shipments from 5 Brazilian suppliers: ADM, Cargill, TerraRoxa, OlamBrasil, and C. Vale. These exporters had been suspended early this year due to "sanitary issues" involving pesticide...