PALMOILMAGAZINE, BEIJING — Chinese soybean importers are facing significantly higher costs if they are required to purchase an additional 8 million tons of U.S. soybeans, at a time when Brazil’s peak export season is offering far more competitive prices. The situation presents Beijing with a delicate balancing act between commercial logic and diplomatic considerations.
From a purely business standpoint, U.S. soybeans are currently less attractive. However, market observers believe the Chinese government could still direct state-owned enterprises to increase purchases in response to political overtures from U.S. President Donald Trump, who recently suggested that Beijing is considering large-scale soybean buying ahead of his planned visit to China in April.
“Is there a market rationale for China to buy more U.S. soybeans just as Brazil’s harvest hits the market? No,” said Even Rogers Pay, Director at Beijing-based consultancy Trivium China, as quoted Palmoilmagazine.com from Reuters on Wednesday (11/2/2026). “But could it help smooth Trump’s state visit and make it more productive? Possibly.”
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Benchmark soybean prices on the Chicago Board of Trade (CBOT) have climbed close to a two-month high, supported by expectations of stronger Chinese demand. Trump has even claimed that China may purchase up to 20 million tons of U.S. soybeans this marketing year following what he described as “very positive” talks with President Xi Jinping.
Yet price competitiveness remains firmly in Brazil’s favor. U.S. soybeans for April shipment are being offered at a premium of around US$2.08–US$2.48 per bushel over the May CBOT contract, including freight to China. By contrast, Brazilian soybeans are priced at approximately US$1.18–US$1.33 per bushel. The spread translates to roughly US$50 per ton on an FOB basis.
“With this kind of spread, buying U.S. soybeans makes little commercial sense,” said a Singapore-based trader. At current price differentials, China could end up paying as much as US$400 million more for 8 million tons of U.S. soybeans compared to sourcing from Brazil.
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The situation is further complicated by tariffs. China continues to impose a 13% import tariff on U.S. soybeans, significantly higher than the 3% applied to Brazilian shipments. As a result, private crushers have shown virtually no interest. Since the marketing season began in September, no Chinese private buyer has reportedly booked U.S. soybean cargoes, while crushing margins in the key processing hub of Rizhao have remained negative since August.
Instead, most purchases have been carried out by state-owned enterprises. Sinograin and COFCO are reported to have bought around 12 million tons of U.S. soybeans since trade discussions resumed in October—despite paying nearly US$100 million more than if the volumes had been sourced from Brazil.
To manage incoming supplies, Sinograin has conducted four auctions since December, releasing approximately 2 million tons of imported soybeans from state reserves. Market participants expect further auctions to take place following the Lunar New Year holiday later this month.
The unfolding scenario underscores how geopolitical considerations can reshape commodity flows—even when market fundamentals point in a different direction. (P2)
