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United States grain exports to China so far this year reached
almost 11 million tonnes according to IHS Markit cargo flow tool Commodities at Sea.
Year-on-year, for the first eight months of this year total major
grain exports to China including soybeans is lower by about 14%.
However, behind the numbers we can notice that not all grain grades
exports are lower. Sorghum and corn exports to China are much
higher year-on-year with sorghum exports reaching about 2.7 million
tonnes this year carried in dry bulk ships bigger than 10,000 dwt.
The biggest drop in exports to China is recorded in soybeans
exports and this brought total grain exports lower despite actual
growth in other major commodities such as sorghum and corn to this
Far Eastern destination.
Year-on-year, US grain exports to all destinations have been
stronger by 4%. Soybean exports to all destinations are lower by
about a quarter of last year's volumes while corn exports more than
compensated the drop of soybean exports, reaching more than 30
million tonnes until September this year.
Following Phase One agreement this year between China and the
US, the above-mentioned gains in exports for some grains overall
helped reach the agreed target, of about 40 million USD of expected
agricultural trade flows from the US to China. It is important to
note that this is not only reserved for major grains. Global Trade Atlas (GTA)
reports that the total value of exports to China for major grains
in the first seven months until August has been about 1.8 billion
USD. Sorghum exports without a doubt influenced a better balance of
grain exports this year. Despite higher corn exports to China it is
worth noting that Black Sea exports are mainly satisfying demand
for corn in China. On top of that US corn exports to China are
subject to import tariff quota, which stands at about 7.2 million
tonnes per calendar year, as per a recent USDA (United States
Department of Agriculture) report. The biggest potential for
improving total grains exports to China is still with soybeans due
to seasonality of the trade.
As per Commodities at Sea, total US
soybean exports to China are currently standing at about six
million tonnes, with almost two million tonnes loaded in the US and
destined for China in August alone. However, soybean exports from
Brazil to China have been very strong this year, as Chinese buyers
utilized favourable currency exchange situations. According to GTA, China imported a record
breaking 54 million tonnes of Soybeans which is the largest
quantity of soybeans that China has imported from Brazil in the
first eight months of a year. Despite seasonal falling of Brazilian
soybean exports to China, exports remain strong, and in August they
were almost five million tonnes as per Commodities at Sea. However,
seasonal exports seem to start picking up from the US, which is
expected to continue throughout the next few months. This trade is
expected to help utilization of some of the shipping tonnage in
Supramax/Ultramax and Panamax sectors.
