China has been grappling with outbreaks of African Swine Fever (ASF) since August. Since then, over 70 cases have been confirmed, with tens of thousands of hogs being culled. China’s growing appetite for pork means that they must import a large quantity of soybeans to use in animal feed, but the effect of ASF on the pork industry is likely to result in lower soybean imports this year. China is the world’s top soybean importer, with most product coming from the US and Brazil. But the ongoing trade war with the Trump administration caused China to increasingly turn to other suppliers, mainly Brazil.
Traders now expect that China’s soybean imports will fall as feed demand from the pork industry declines. The country is currently sitting on a large stock inventory of soybeans, also contributing to lower import demand. China’s soybean imports for December 2018 are forecast at 6 million tonnes, representing a decline of 37 percent from the same time last year. Estimates for the first quarter of 2019 aren’t looking bright either, with shipments expected to reach just 11 million tonnes, down from 19.6 million tonnes during Q1 of 2018.
Soybean markets and the ongoing US-China trade war will be sharply in focus during the upcoming G-20 Summit in Argentina. The world will be watching to see what happens next on global soybean markets.