Singapore/Beijing (Reuters) – China is dealing with a glut of soybeans after months of record imports, dampening prospects for U.S. exports despite a recent trade truce that Washington says includes a pledge from Beijing to resume heavy buying.
Traders and analysts warn that vast inventories at ports and state reserves, coupled with weak crush margins, limit Beijing’s appetite for new purchases.
“State-owned enterprises may be waiting for margins to recover before making large-scale purchases,” said Johnny Xiang, founder of Beijing-based AgRadar Consulting. “Even with the exemption from tariffs, margins remain negative and Brazilian soybeans are still cheaper.”
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After President Donald Trump met with Chinese leader Xi Jinping last month, officials in Washington said China had agreed to buy 12 million tons of U.S. soybeans by the end of the year and 25 million tons in each of the next three years.
China has not publicly committed to making purchases, although it has lifted retaliatory tariffs on U.S. imports, while state buyer Cofco has reserved just a few cargoes for shipment in December and January, according to traders and analysts.
Increased inventories, reduced margins
Chinese buyers sharply increased purchases of South American soybeans earlier this year while avoiding those from the United States, fearing a deficit if the trade war with Washington drags on, leading to an oversupply.
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Soybean stocks at Chinese ports reached a record 10.3 million tons on Nov. 7, an increase of 3.6 million tons from a year earlier, while processors held 7.5 million tons, the highest volume since 2017, according to data from Sublime China Information.
Physical prices for soybean meal, used to fatten animals in the world’s largest pig producer, have fallen more than 20% from their peak in April in the main coastal regions, standing at around 3,000 yuan ($421) a ton, according to data from Mysteel.
These areas are the northern region of Tianjin, the eastern provinces of Shandong and Jiangsu, and southern Guangdong.
Chinese crushers have been facing losses since mid-year, with a negative margin this week of around 190 yuan per tonne at the Rizhao processing center, and traders expect margins to remain negative until at least March.
“There is not much room for China to increase soybean imports,” said a trader at an international company that runs oilseed processing plants. “Soy stocks are huge and demand from the feed sector is very slow.”
Few signs of major purchases
Market expectations that state grain importers Cofco and Sinograin will quickly resume significant purchases as a gesture of goodwill following trade talks have not yet materialized.
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It is still possible for state-owned companies to make large purchases despite market conditions. “The administration expects our trading partners to meet their trade commitments,” a US official told Reuters.
“The President reserves the right to adjust tariff rates, export controls, and other concessions to hold our trading partners accountable to their settlement commitments.”
China’s Ministry of Commerce did not immediately respond to a request for comment.
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China’s grain and oilseed stocks are a state secret, but at least two traders have estimated soybean stocks held by state-owned companies at around 40 million to 45 million tons.
That would be double Chinese imports from the U.S. last year and enough for five months of typical early-year demand.
Private importers continued to reserve Brazilian cargo for shipment in December. Brazilian soybeans for shipment in January were priced at about $480 per ton, including cost and freight to China, compared with $540 to $550 per ton for U.S. cargoes.
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Chinese importers have reserved about 2 million tons of soybeans for shipment in December, covering more than 40% of projected demand for the month, while bookings for January remain slow, traders said.
“There is very little indication that state buyers are engaged in a program to purchase 12 million metric tons before the end of this year, let alone 25 million tons more for calendar year 2026,” wrote Arlan Suderman, chief commodities economist at StoneX, in a note Tuesday.
