Soybeans sow seeds of discontent in US and China's trade war
The soya bean market has become an unlikely flashpoint in the global trade wars.
Production of the commodity is being studied carefully for signs of whether trade tensions between the US and China are likely to escalate.
Economists are watching to see if China suddenly ramps up domestic production of soya beans. Such a move could be an indication that the country is planning to pursue a trade war with the US in earnest, experts believe.
The country’s imports of soya beans are currently greater than the entire exports of non-US producers. A decision to abandon US imports would leave a significant shortfall for Chinese consumption that would need to be filled by domestic producers.
Donald Trump, the US president, has announced $60bn (£43bn) of tariffs on Chinese goods and China retaliated with lesser, though equally targeted, tariffs on US imports.
The tariffs that have already been proposed would have a marginal impact on the US economy overall, economists believe, but some individual sectors would be hard hit. An escalation of the trade war could knock 0.5pc off global growth in 2019, according to consultancy Oxford Economics.
As a result of this risk to the global economy, there is heightened interest in areas of Chinese activity.
Mark Williams, economist for Oxford Economics, said some “recent events could be read as a shot across the bow of US farmers”.