As rising trade tensions have pummeled Sino-U.S. agricultural trade—and the Trump administration’s sanctions on the Islamic Republic come into force—a curious pattern has emerged. China, in previous years by far the largest customer for American soybeans, has radically scaled back purchases. It bought just $24 million worth in September, down from $1.1 billion in September 2017.
Meanwhile another U.S. geopolitical rival Iran, which in the first half of 2018 bought no U.S. soybeans at all, is taking advantage of deep discounts on American beans to stock up: It bought $140 million worth in August, becoming the top foreign customer for the month according to U.S. Department of Agriculture data. In September, it bought another $44 million, nearly twice as much as China.
China doesn’t buy many U.S. soybeans anymore, but it still buys plenty of oil from Iran, which now seems to be using some of those dollar earnings to stock up on U.S. soy. The little ironies of world trade keep going round and round.
