Beijing Secures 12 Million Tons of US Soybeans Before Trade Barriers Rise

2026-01-22 economy

Beijing, Wednesday, 21 January 2026.
Beijing has finalized its 12-million-ton purchase commitment weeks ahead of schedule, strategically utilizing state-owned enterprises to stockpile essential commodities just as the Trump administration prepares to escalate tariff threats.

Fulfilling the Pledge Ahead of Deadline

In a decisive move to stabilize trade relations before the potential implementation of new tariffs, Beijing has successfully completed its commitment to purchase 12 million metric tons of U.S. soybeans. Treasury Secretary Scott Bessent confirmed on Tuesday, January 20, 2026, while speaking in Davos, Switzerland, that China had met this significant purchasing milestone [1]. The procurement was finalized well ahead of the end-of-February deadline established during the trade truce reached between President Trump and Chinese leader Xi Jinping in South Korea last October [2][5]. According to traders, the 12-million-ton target was technically reached as of January 12, 2026, driven by bulk purchases from state-owned agricultural giants Sinograin and COFCO [2]. These acquisitions come after a period of stagnation where Beijing had paused purchases of U.S. soybeans the previous summer [1].

State Maneuvering and Market Mechanics

The execution of this deal relied heavily on state intervention rather than purely market-driven forces. To accommodate the influx of American grain, Sinograin conducted four auctions in the weeks leading up to January 19 to clear storage space for the incoming shipments [2][5]. The logistics are already in motion; the vessel Ocean Harvest is scheduled to arrive at the port of Zhangjiagang around January 26, 2026 [2]. Furthermore, to facilitate these transactions, Beijing implemented specific policy adjustments, including lowering soybean import tariffs and lifting import bans on three U.S. suppliers [6][7]. However, despite this burst of activity, market analysts note that much of this volume is likely destined for state reserves rather than immediate commercial consumption [2].

Erosion of U.S. Market Dominance

While the fulfillment of this short-term pledge offers temporary relief to American farmers, the broader economic data paints a concerning picture of eroding U.S. competitiveness. In 2025, the U.S. market share of China’s soybean imports plummeted to just 15%, a significant drop from the 21% recorded in 2024 [2][5]. Conversely, Brazil has solidified its dominance, with its beans accounting for more than 70% of China’s imports last year [1]. In 2025 alone, China’s total soybean imports from Brazil climbed to 111.8 million tons, representing a year-on-year increase of 6.5 percent [3]. The structural shift is stark; unless U.S. prices become competitive with South American supplies, traders suggest further purchases are unlikely until the new U.S. crop becomes available in September [2].

Price Volatility and Future Uncertainty

The markets have reacted to these developments with characteristic volatility. On Tuesday, January 20, soybean prices initially jumped above $11.50 per bushel before retreating to approximately $10.56 per bushel [1]. This fluctuation reflects the deep uncertainty plaguing the agricultural sector. Looking ahead, the White House has stated that China is committed to purchasing at least 25 million metric tons of U.S. soybeans annually for the next three years, starting in 2026 [2][5]. However, with Brazil’s record 2025/26 crop of 178 million metric tons hitting the market in March, the ability of U.S. exporters to reclaim market share remains in question [3]. As noted by agricultural economists, the convergence of shifting land rental markets and input costs is severely pinching American farmers’ cash flows, making the long-term viability of this trade truce a critical economic variable [1].

Sources

International Trade Commodities