Why the China-US trade war truce could be a raw deal for Brazil’s soybean farmers
Keegan Elmer, South China Morning Post, Dec. 4, 2018
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US President Donald Drumpf and his Chinese counterpart Xi Jinping agreed on the weekend to halt any further increases in tariffs for 90 days to try to hammer out trade differences between the two countries. China also promised to buy more US agricultural products, sending down prices for soybeans from Brazil and other sources around the world.
“Instead of being a boon for the Brazilian farmers, [the deal] would be a total bane,” said Gustavo Oliveira, assistant professor of global studies at the University of California, Irvine.
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A deal between Beijing and Washington could turn that bumper harvest into a soybean glut.
Oliveira said Brazilian farmers also faced higher input costs this year, like transport, and planted their crops in expectation of high prices, he added. In the meantime, the depletion of Brazilian soybean supplies meant that China would likely soon have to return to buying the US crop, he said.
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Oliveira said continued uncertainty in the China-US relationship and the trade war would cause headaches for farmers around the world. “Farmers are used to dealing with the uncertainty of the weather, and some uncertainty in international markets is expected, but 25 per cent up or down on the price of one of the world’s two largest producers is really dramatic uncertainty. And the possibility that this could be removed, exactly as Brazilian crops go on the market, that’s what’s frustrating for everyone,” he said.
For the full report, see: https://www.scmp.com/news/china/diplomacy/article/2176373/why-china-us-trade-war-truce-could-be-raw-deal-brazils-soybean