Since China implemented a 25% import tariff on US soybeans in July, we have seen major changes in the soybean shipping market. As the US harvests a record crop, its exports to China, the world’s second largest soybean trade last year, have ground to a halt. Meanwhile China has consolidated its dominance over Brazilian exports, displacing other buyers.
As a result, this season we are seeing new and unusual trades emerge as US soybeans fall in price and alternative export markets open up. This is likely to have a negative effect on demand in the short run, but in the long run, the changes have the potential to generate increased demand for bulkers.