China’s Strategy in Soybean Trade War
Country is confident it can wean itself off U.S. soy with little financial pain
The executive from one of China’s biggest soybean crushers sat on a panel at a Kansas City agricultural exports conference, listening to an expert beside him explain why China would remain dependent on U.S. soybeans to feed its massive hog herds.
According to a report at Reuters, when his turn to speak came, Mu Yan Kui told the international audience of soy traders that everything they just heard was wrong. Then Mu ticked off a six-part strategy to slash Chinese consumption and tap alternate supplies with little financial pain.
The comments echo a growing confidence within China’s soybean industry and government that the world’s largest pork-producing nation can wean itself off U.S. soy exports – a prospect that would decimate U.S. farmers, upend a 36-year-old trading relationship worth $12.7 billion last year, and radically remap global trade flows.
Just one prong of the strategy Mu detailed - to slash soymeal content in pig feed - could obliterate Chinese demand for U.S. soybeans if broadly adopted, according to Reuters calculations.