Asian buyers shun US farm goods, hit by ship crunch and trade war

By Naveen Thukral

SINGAPORE (Reuters) – Asian consumers are lowering purchases of U.S. agricultural items as Washington’s deliberate charges on China-linked vessels and sweeping import duties on key regional buying and selling companions stoke uncertainty and dampen urge for food for American merchandise.

China, which retaliated with 34% duties on U.S. items, is the biggest importer of U.S. agricultural merchandise, however different Asian nations together with Japan, South Korea and Thailand additionally purchase important volumes of U.S. wheat, corn, and soybean meal.

President Donald Trump’s plan to revive U.S. shipbuilding utilizing port charges of as much as $1.5 million on China-linked ships has pressured exporters to hunt for non-Chinese language ships and, in flip, pushed up freight prices, denting demand for U.S. farm items.

“It makes the U.S. now an unattractive vacation spot for over half of the world’s fleet,” stated Kansas-based freight marketing consultant Jay O’Neil.

Ship homeowners and operators are reluctant to supply quotes for U.S. ports for April, Might and June as a result of looming charges, he stated.

The delivery challenges and commerce struggle uncertainties are prone to weigh on benchmark Chicago soybean and wheat futures, that are buying and selling near multi-month lows, merchants stated. [GRA/]

“As of now, most importers aren’t taking the danger of importing from the U.S.,” stated a Singapore-based dealer at a world firm which sells U.S. grains and oilseeds into Asia. “Transport prices have gone up and there may be a lot uncertainty over the commerce struggle.”

U.S. tariffs on dozens of nations took impact on Wednesday, together with huge 104% duties on Chinese language items, even because the president ready for negotiations with some nations.

SCARCE SHIPPING

Asia buys about 35% of wheat and corn shipped worldwide. For soybeans, China takes greater than 60% of the oilseed traded globally.

Whereas different Asian grain importers aren’t anticipated to retaliate in opposition to U.S. tariffs, restricted vessel availability and trade-war uncertainty are taking a toll on buying, merchants stated.

“We are attempting to change vessels for cargoes we had booked earlier to produce U.S. wheat to Southeast Asia. We’re having to pay increased freight to get a non-Chinese language boat. So for now it’s a massive no to U.S. grains,” a second Singapore-based dealer stated.

Conventional U.S. wheat consumers like Japan and South Korea are anticipated to proceed buying American cargoes, nonetheless they could purchase some corn and soybeans from various suppliers in South America and the Black Sea area.

“As of now, shopping for of U.S. merchandise has nearly stopped. However wanting forward, we anticipate Japan and South Korea to maintain taking U.S. wheat as they’re dedicated to purchasing from the U.S.,” the second Singapore dealer stated.

It’s tough for consumers like Japan and South Korea to change from U.S. wheat as it’s used for direct human consumption, however they’ll shift to various shipments for feed grains corresponding to corn and soybeans.

Most Southeast Asia grain importers have but to e book about half of their requirement for Might, the second Singapore dealer stated, leaving them weak to produce shortfalls.

Mike Steenhoek, govt director of the Soy Transportation Coalition in america, stated a outstanding U.S. exporter was unable to get bids from ocean vessel corporations to ship soymeal due to the proposed price on China-linked vessels.

“You are already seeing influence.”

(Reporting by Naveen Thukral; Further reporting by Tom Polansek and Karl Plume in Chicago; Enhancing by Sonali Paul)