• ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
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    -2.7%
  • TSTOPVRPM.CHIATL
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  • TSTOPVRPM.LAXSEA
    1.700
    0.130
    8.3%
  • TSTOPVRPM.ATLPHL
    1.520
    0.060
    4.1%
  • TSTOPVRPM.LAXDAL
    1.120
    -0.030
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  • WAIT.USA
    139.000
    -12.000
    -7.9%
  • ITVI.USA
    9,157.620
    -27.560
    -0.3%
  • OTRI.USA
    2.590
    -0.020
    -0.8%
  • OTVI.USA
    9,162.320
    -26.570
    -0.3%
  • TLT.USA
    2.670
    -0.010
    -0.4%
  • TSTOPVRPM.DALLAX
    1.230
    -0.070
    -5.4%
  • TSTOPVRPM.PHLCHI
    1.100
    -0.030
    -2.7%
  • TSTOPVRPM.CHIATL
    1.290
    -0.060
    -4.4%
  • TSTOPVRPM.LAXSEA
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  • TSTOPVRPM.ATLPHL
    1.520
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  • TSTOPVRPM.LAXDAL
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  • WAIT.USA
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American ShipperShippingTrade and Compliance

BIMCO: Shipping feels impact of soybean tariffs

The shipping analyst said shipments of soybeans from the United States to China were down by 18 percent or 2 million tons in first two months of 2018.

   BIMCO says there is already some some evidence that China’s higher tariffs on U.S. soybeans is being felt in the shipping industry.
   “The uncertainty in the shipping market has already been felt,” said Peter Sand, the chief shipping analyst for BIMCO, a shipowner group based in Denmark. “Anecdotal evidence of fewer U.S. Gulf cargoes heading for China is an indicator of this. Changes in pricing of soya beans is another effect already seen.
   “In terms of volume, the coming months will show us exactly how much Brazil can further ramp up its exports to China. Brazil is already the leading provider of soya beans to China, but unable to become a full substitute for U.S. exports this year,” he added.
     BIMCO said soybeans are one of the most significant commodities that may be impacted by a trade war between the U.S. and China and that “trade lanes will be affected if the Chinese buyers shy away their traditional suppliers because of the extra cost from the proposed tariff on U.S. soya beans, a move that may favor Brazilian ones further, which also hold a higher protein content.
   “As U.S. soya bean exports are currently out of season, the first indication of the effect will be an indirect one as the Brazilian soya bean exports’ season is just about to lift off, peaking in May-July,” said BIMCO.
   BIMCO said in 2017, the dry bulk shipping industry transported 51 million tons of soybeans at an approximate distance of 11,000 nautical miles from Brazil to China, compared to exports from the United States of 33 million tons.
    BIMCO said the United States lost a bit of its share in the Chinese market when China established stricter import standards that went into effect Jan. 1. BIMCO said shipments of soybeans from the United States to China were down by 18 percent or 2 million tons in first two months of 2018.
   The degree to which Brazil soybeans are substituted for U.S. exports could be anywhere from zero to 82 percent, “probably depending on the price,” Sand said.
    He noted that Brazil and the United States ship their produce at different times of the year, with 80 percent of Brazilian exports happening between April and September and U.S. exporters shipping 80 percent of their product between November and March.
   “For the shipping industry, traders, exporters and importers, this
delayed impact gives leeway for them to adjust their business to a ‘new
reality’ in due time before the real effects of a trade war involving
global shipping of soya beans is felt,” said Sand.
   A study for the U.S. Soybean Export Council conducted by
Purdue University agricultural economists Wally Tyner and Farzad
Taheripour concluded that “Chinese soybean imports from the U.S. could drop by as much 71 percent if China were to impose trade restrictions on U.S. soybeans in response to U.S. tariffs on Chinese products,” according to an article posted on Purdue’s Agriculture News website.

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Chris Dupin

Chris Dupin has written about trade and transportation and other business subjects for a variety of publications before joining American Shipper and Freightwaves.
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