KUALA LUMPUR, Dec 5 (Bernama) -- Bursa Malaysia closed lower on Friday amid mixed regional market performance as investors turned cautious over a possible rate hike by the Bank of Japan (BOJ) and upcoming US economic data that may influence the Federal Reserve’s (Fed) interest rate decision next week. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) pared most earlier losses to settle 4.55 points easier, or 0.28 per cent, to 1,616.52 from Thursday’s close of 1,621.07. The benchmark index, which opened 0.37 of-a-point lower at 1,620.70, moved between 1,609.67 and 1,621.25 throughout the day. The broader market was negative, with decliners outpacing advancers 604 to 439. A total of 550 counters were unchanged, 1,151 untraded, and 18 suspended. Turnover declined to 3.17 billion units worth RM2.24 billion from 4.48 billion units worth RM2.75 billion yesterday. Rakuten Trade Sdn Bhd vice-presiden...
Key Takeaways
China may import up to 10 million tonnes of soybeans from Argentina and Uruguay in 2025/26, a record level.
Already 2.43 million tonnes booked for Sept 2025–May 2026 shipments.
Shift reduces reliance on the US, reinforcing Beijing’s long-term food security strategy.
Bumper harvests in Argentina (50.9m tonnes) and Uruguay (4.2m tonnes) underpin higher supply.
Brazil remains the dominant supplier, but diversification dilutes US market share further.
Strategic Shift in Supply Chains
China, the world’s largest soybean importer, is accelerating diversification of its supply base away from the US amid escalating trade tensions. This move follows years of Beijing’s policy to reduce exposure to US farm products, a strategy that gained momentum after tariffs were first imposed during Donald Trump’s initial presidential term.
The US traditionally relied on Q4 sales to China—its peak export window following harvest. Notably, China has not booked any US soybean purchases for Q4 2025, leaving US exporters increasingly sidelined.
Record South American Imports
Chinese buyers are expected to source up to 10m tonnes from Argentina and Uruguay in 2025/26, nearly double the 5m tonnes imported during Sept 2024–July 2025.
Bookings to date: 1.575m tonnes for Sept 2025, 660k tonnes for Oct, and smaller parcels for Nov, Dec, and May 2026.
Argentina’s harvest recovery (50.9m tonnes vs 25m in 2022/23 drought year) and Uruguay’s stronger output (4.2m tonnes vs 3.3m prior year) provide ample supply to meet China’s demand.
This expansion complements China’s large-scale imports from Brazil, which has steadily increased market share over the past decade.
Market Implications
US Exporters Under Pressure
The US accounted for only 12% of China’s agri imports in 2024, down from 20% in 2016.
Without Chinese demand during its peak season, US farmers face inventory overhang and price headwinds.
South America as Structural Winner
Brazil, Argentina, and Uruguay increasingly anchor China’s soybean supply chain.
Argentina’s improving crop cycle and Uruguay’s rising production bolster their long-term positioning.
Food Security Strategy
For Beijing, diversifying sourcing reduces geopolitical risk and secures feedstock for its massive livestock sector.
Aligns with China’s broader policy of lowering dependence on US imports across strategic commodities.
Outlook
Barring a de-escalation in trade tensions, we expect:
South American share of China’s soybean imports to rise further in 2025/26.
US soybean exports to remain weak, with global price dynamics skewed towards South American harvest cycles.
Potential for structural shifts in global trade flows, as China cements long-term supply contracts outside the US.
Investor View:
Soybean futures may remain volatile as US demand weakens while South American exports strengthen.
Agribusiness equities in Brazil and Argentina stand to benefit from volume growth and rising Chinese reliance.
US farm sector faces downside risks unless policy shifts reopen Chinese demand.
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