Trade War Bites China's Ag Trade

China's November customs data show the trade war in agricultural products started biting both China and the United States last month. China's imports from the United States were down sharply from a year earlier, and Brazil's supply of farm product sales to China fell off the torrid pace set during the trade war's initial months.

During November 2018, the value of China's agricultural imports fell behind its year-earlier value for the first time this year. China's imports of agricultural products from the United States fell to $353 million. That total was $2.48 billion less than the value in November 2017.

Brazil was again, by far, the leading supplier of China's ag imports during November, supplying 18 percent of the $10.6 billion total. By comparison, the 27 European Union countries supplied half as much as Brazil--9 percent--and the United States supplied only 3-percent (down from 26 percent in January), a little less than shares supplied by Indonesia, Canada and Australia, and a little more than shares supplied by New Zealand, Vietnam and Thailand.

Trouble is, the $1.9-billion from Brazil during November was well below the $3-to-$4-billion-per-month pace sustained during May-October when Chinese buyers were hoovering up every Brazilian soybean they could find.

China imported 5.38 million metric tons of soybeans during November 2018--of which 5 mmt came from Brazil--but that was down from 6.9 mmt in October and the lowest monthly total in 2018. China's customs data show no soybean imports from the United States during November, normally the peak season for imports of U.S. beans. A year ago, China imported 8.68 mmt in November 2017, of which 4.6 mmt came from the United States.

China customarily cuts back on grain imports during the fall months when its own grain harvest is at its peak, but this year the reduction has been sharper than usual. The 2018 "number one document" set a priority on disposing of corn and rice stocks this year. Imports of corn and its substitutes from all countries have plummeted since May as authorities ramped up their auctions to offload corn reserves. Barley imports--mainly from Australia--remained relatively robust until November when they also plunged. An antidumping investigation will likely choke off those shipments.

China is importing substantial animal protein. China's meat imports remained relatively steady at over $900 million in November, while imports of fish and seafood exceeded $1 billion. Declining pork prices early in the year slowed pork imports. The 90,000-mt volume of pork imports during November was in line with monthly imports since June. Beef imports have ratcheted upward to more than 100,000 mt in November. Only 1 percent of China's meat imports came from the United States in November. The U.S. supplied 6 percent of China's fish and seafood imports, but that was down from 10 percent in October.

Share of China agricultural imports that came from U.S. 2018 (Percent)
Month	All agri- cultural*	Oilseeds (HS12)	Grains (HS10)	Meat (HS02)	Fruit and Nuts (HS08)	Cotton (HS52)
Jan	26	62	22	6	14	17
Feb	25	53	33	8	4	28
Mar	22	48	27	13	8	21
Apr	17	33	20	8	6	19
May	10	6	20	5	6	18
Jun	9	8	22	5	10	11
Jul	6	5	6	4	11	6
Aug	5	4	0.3	3	4	5
Sep	5	3	3	2	4	4
Oct	5	2	0.2	2	8	4
Nov	3	0.7	0.6	1	11	3
*Agricultural = HS codes 01 to 24, 41, and 52.