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Swine Flu Outbreak in China Negatively Impacts Soy Demand
USAgNet - 03/13/2019

As the U.S. and China continue to negotiate a trade deal aimed at satisfying both sides, soybeans are emerging as a bargaining chip for Beijing to use as leverage in those talks. But while Beijing has pledged to buy more American soybeans, analysts question if China -- the world's largest consumer of the oilseed -- has the appetite for it.

In addition to tariffs brought on by the ongoing trade dispute, falling import numbers and an outbreak of African swine fever in China have added to concerns that the world's second largest economy may not be able to live up to its pledges to buy more, reports CNBC.

According to U.S. Agriculture Secretary Sonny Perdue, China has committed to buying an additional 10 million metric tons of U.S. soybeans. Beijing has also reportedly offered to purchase more than $30 billion in American agricultural produce a year as part of a trade deal.

However, customs data show that soybean imports have been falling in recent months.

Last year, China's soybean imports from the U.S. hit its lowest in a decade. More recently, customs data showed that soybean imports in February fell to their lowest monthly level in four years -- or 17 percent lower than a year ago, in part due to heavy tariffs on American soybeans.

"The trade conflict will certainly be playing an important role because China will no doubt have imported significantly fewer soybeans from the U.S.," Commerzbank analysts wrote in a note on Friday. "U.S. export figures had already raised doubts about whether China would buy the promised 10 million tons of soybeans in the U.S. These doubts have not been reduced by (February's export) data from China," the bank's analysts added. African swine fever outbreak

To make matters worse, China is also grappling with an outbreak of swine fever, which has dragged down its soybean demand as the oilseed is used for animal feed.

Since August, China has reported 111 outbreaks of African swine fever in 28 of its provinces and regions. About 1 million pigs have been culled so far in an effort to try to control the spread of the disease, according to a Reuters report. There is neither cure nor vaccine for swine fever, which is highly contagious and fatal to pigs, though it does not affect humans.

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