China-US Trade Tensions: Chinese soybean farmers concerned about possible market fluctuation

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03:03

China has placed a 25 percent tariff on American farm products like soybeans, in response to US levies on Chinese goods. But what impact is China's decision having on its farmers? As GUAN YANG reports, farmers in northeast Liaoning Province are concerned about possible fluctuations in the soybean market.

Soybean oil maker Zhang Yanlong has always been proud of his organic soybean oil. The family-run business in Changtu county uses only non-GMO soybeans that grow locally.

ZHANG YANLONG SOYBEAN OIL MAKER "It is now the off season for our business. We normally get busy before big holidays, when people start doing more shopping. The locals here prefer the non-GMO soybean oil."

China is the largest buyer of American soybeans worldwide, and most imported soybeans are genetically modified. Which means, a 25% increase on US Soybeans will push up prices in the domestic GMO soybean market. That's good news for the non-GMO soybean planters who are only capable of producing roughly 20% of the soybean needed nationwide.

ZHANG YANLONG SOYBEAN OIL MAKER "We didn't see an immediate fluctuation in soybean prices, either GMO or non-GMO ones. I think the changes will happen slowly, because now we still have stockpiles of soybeans. Like the ones in my shop, they were from last year's stock.

China was the world's largest importer of soybeans in 2017. Net imports grew nearly 15% year-on-year last year to over 100 million tons, which were mainly used in the production of livestock feed and vegetable oil. In terms of domestic soybean production, farmers have chosen to grow corn over the less-profitable soybeans in recent years.

GUAN YANG CHANGTU COUNTY, LIAONING PROVINCE "As the trade conflict escalated, China fired back with dollar-for-dollar tariffs, mainly on American farm produce like soybean. In the long term, the fluctuation of soybean prices are expected on both sides of the Pacific: from the fields of Illinois and Iowa to remote villages in China's northeast - the country's major soybean planting region."

WU DAN, MANAGER FENGMANYUAN FARM "We are considering converting more land for growing soybeans next year, if the soybean prices and the subsidies from the government are attractive. These details will soon be disclosed before the harvest season."

As tariffs have caused uncertainties in many sectors, Chinese soybean farmers are keeping a close eye on any possible market fluctuation. What's certain - when the price of soybeans goes up, farmers are more willing to plant them. GUAN YANG, CGTN.