Imports of US soybeans by the European Union (EU) have increased by 112 percent in the second half of 2018 (July-December 2018), compared to the same period in the previous year. With a share of 75 percent of EU soybeans imports, the US is Europe's number one supplier, according to new statistics released by the European Commission yesterday (January 7).
Conversely, Europe remains by far the top destination of US soybeans exports (28 percent), followed by Argentina (10 percent) and Mexico (9 percent), as the impact of a trade dispute between the US and China heats up.
The EU imports about 14 million tons of soybeans per year as a source of protein to feed animals, including chicken, pigs and cattle, as well as for milk production. Soybeans from the US are a desirable feed option for European importers and users, thanks to their competitive prices.
The data included in the report published yesterday on soybeans comes from the Crops Market Observatory which the European Commission launched in July 2017 to share market data and short-term analysis to ensure more transparency.
Last year reported that when the trade conflict between the US and China first began to bite, the US soybean industry was bracing itself for severe losses as China slapped tariffs on the legumes as part of a retaliation package. While the industry continues to advocate for an end to the tariff war and long-term solutions to the loss of export markets, figures revealed that the US had overtaken Brazil as the leading soybean supplier to the European Union with a 52 percent market share.
Chinese importers made their third largest soybean purchase from the US in the last month on Monday, January 7, as officials from both countries met this week for the first face-to-face talks since agreeing to a 90-day trade war truce on December 1, according to reports.
The current trade war truce agreed between China’s Xi Jinping and US President Donald Trump expires on March 1.
Part of the implementation of the Joint Statement agreed between EU President Juncker and US President Trump in July 2018 notes that the two sides agreed to increase trade in several areas and products, notably soybeans. As a result, the European Commission now regularly publishes figures on EU imports.
These latest significant developments in the second half of 2018 contribute to cementing the US's leading position in supplying the EU with soybeans for the entire calendar year, well ahead of Brazil, Europe's traditional main supplier. For the full 2018 calendar year, 50 percent of Europe's imports originated in the US and 36 percent in Brazil (37 percent in 2017).
European imports of US soybeans are bound to increase even further, following the decision by the European Commission to launch the process for authorizing the use of US soybeans for biofuels.
The report shows that:
Compared to the first 27 weeks of the 2018 marketing year (July-December), EU imports of soybeans from the US are up by 112 percent at 5,181,833 tons;
In terms of the EU’s total imports of soybeans, the US share is now at 74.5 percent, compared to 39 percent in the same period last year. This puts the US well ahead of Brazil (19 percent), the EU’s second main supplier, followed by Canada (2 percent), Ukraine (1.6 percent) and Paraguay (1 percent).
In December 2018, the European Commission launched a public consultation on the decision to authorize the use of US soybeans for biofuels in Europe. According to the Commission's assessment, the “US Soybean Sustainability Assurance Protocol” submitted by US soy exporters meets the mandatory sustainability requirements of EU legislation for their use in biofuels.
The draft implementing decision has been published for feedback until January 16 on the Better Regulation website and should be adopted in the coming weeks, allowing US exporters to diversify their European markets further while contributing to the EU's objectives in the field of renewable energy.
