Big Business Wars or Game of Thrones ?!

Friday, 06 December 2019 00:00 Written by  font size decrease font size decrease font size increase font size increase font size

US soybean exporters to China can take a look at what is likely to happen at the experience of the US chicken meat export to Russia, following Ukraine&Russia war in 2014.

Experts believe that market reactions to the US-China trade war and Russia-Ukraine war are very similar.
In both cases, the United States was the dominant export market.
Prior to the trade war between China and the United States, on average, Chinese bought more than 57 percent of US export soybeans. The rate has fallen to less than 2% since the start of the recent conflict.
But data suggest that the situation will hardly return to normal after the decline in US product purchases. For example, Russia has completely stopped buying chicken meat from this country since year 2014.
The change in approach, though accompanied by US sanctions, had no effect on the situation.
This equation becomes even more interesting when, in both of these wars, the Brazilians penetrated the US target markets and increased their share of the products.
The Brazilians are now the largest exporter of soybean in the world. Many believe that recent fires in the Amazon forests are rooted in the increased cultivation of this crop in Brazil.
On the other hand, although Chinese without soybeans and Russians without exported American chicken meat may have problems in their market, they tried to not only meet their needs in different ways but also to exporters of products.
Russia is currently planning to export chicken meat to China.
In the end, such trade disputes appear to have provided a golden opportunity for some countries such as Brazil, to further expand their export-produced products market.

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