iGrain India - The global soybean market in 2025 is likely to experience significant disruptions if the trade dispute between the US and China escalates. Here are the key factors influencing the market:
Decline in US Soybean Exports: If the US-China trade relationship worsens, it could lead to a sharp reduction in US soybean exports by up to 50 crore bushels. This would increase the surplus stock of soybeans in the US, which could reach 95.60 crore bushels, putting pressure on domestic prices and global supply.
Brazil's Rising Soybean Production: Brazil is expected to see record-breaking soybean production in 2025, which will likely increase its export capacity. While Brazil remains an important supplier to China, the increased supply could pressure prices and make it difficult for prices to remain bullish for an extended period. The expectation is that Brazilian soybean export prices may initially remain higher than due to the supply-demand dynamics, but this could change as production surges.
Argentina's Competitive Soybean Offer: Argentina's soybean prices are currently competitive for the Chinese market, and exports are expected to remain strong in the 2024-25 marketing season. The increase in soybean production in both Brazil and Argentina is expected to ease the global supply constraints for soy oil and soy meal, thereby impacting prices and availability.
US-China Trade Policies Under President Trump: With Donald Trump set to assume the US presidency again in January 2025, there are expectations that tariffs on Chinese imports, including soybeans and corn, could be raised. If China reduces its imports from the US, it could further shift demand towards Brazil and Argentina, increasing competition among these countries for the Chinese market.
Price Pressure and Market Adjustments: Due to the significant production increase in Brazil and Argentina, it is likely that soybean prices, which may have been higher due to supply concerns, will stabilize or decrease. This could result in a normalization of soybean prices, especially as global production reaches new highs.
Overall, the global soybean market will experience a period of volatility in 2025, with potential shifts in supply dynamics, changes in trade patterns, and price fluctuations due to increased production in South America and the ongoing trade tensions between the US and China.