Brazil’s position as China’s leading soybean supplier continues to strengthen in 2025. This dominance is primarily driven by Brazil’s record-breaking soybean harvests, its competitive pricing in the global market, and the crucial absence of tariffs that still affect U.S. soybean exports to China, reports AJOT.
Tariff Truce
Despite the recently implemented 90-day tariff truce between the U.S. and China, and China’s subsequent reduction of soybean import tariffs from 145% to 10% effective May 14th, U.S. soybean exports continue to face significant pressure. Many American farmers remain doubtful about the positive impact of these developments. Their skepticism stems from the understanding that unless there is a substantial disruption in the soybean supply from South America, China is unlikely to significantly increase its purchases from the U.S. Reflecting these concerns, some market forecasts are already projecting a considerable 20% decline in U.S. soybean exports. This potential drop in exports could drive soybean prices down to approximately $9 per bushel, a notable decrease from the current price level of $10.60.
Furthermore, China’s strategic strengthening of ties with Latin America is evident in a recent summit held in Beijing. During this summit, President Xi Jinping announced a $9 billion investment credit line and other incentives aimed at bolstering partnerships in the region. Brazil’s President Lula underscored the “unbreakable” nature of the relationship between Brazil and China, emphasizing the benefits that Brazil has accrued from the trade tensions between the U.S. and China, particularly within the soybean sector.
Analysis of the latest dry bulk flow data from Signal Ocean regarding soybean shipments from Brazil to China corroborates these trends. In the initial months of 2025, U.S. soybean exports to China experienced a marked seasonal surge, reaching new highs. Starting from a low of approximately 1 million tonnes in January, volumes increased sharply in February and March, peaking in April at over 11 million tonnes – the highest monthly figure recorded since the beginning of 2023. When compared to April 2024, which saw approximately 9.5 million tonnes, the April 2025 figure represents a year-on-year increase exceeding 15%, indicating strengthened trade flows. While slightly lower than April, May 2025 still maintained historically elevated levels, suggesting sustained demand beyond the typical peak season. This robust flow of Brazilian soybeans to China highlights the ongoing shift in trade dynamics.
Sustained Trend
Analysis of the latest Signal Ocean dry bulk flow data indicates a robust and sustained trend in soybean shipments from Brazil to China. While U.S. soybean exports to China experienced a significant seasonal surge in early 2025, reaching a peak of over 11 million tonnes in April (the highest monthly total since early 2023 and a year-on-year increase of over 15%), Brazilian soybean shipments are also demonstrating strength. Preliminary data for the first half of May already shows volumes at 50% of April’s total, suggesting continued strong shipments from Brazil through the end of the month.
Despite these strong volumes of soybean voyage shipments to China, Baltic rates on the Santos–Qingdao route have not yet shown a significant rebound. This lack of upward pressure on freight rates is likely attributable to relatively smooth port operations in Santos. Signal Ocean congestion time series data confirms this, showing that vessel counts remain well below the congestion peaks observed in early 2023 and mid-2024. This logistical efficiency, despite increased cargo movement, is limiting any upward momentum in pricing.
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Source: AJOT
