China's Large US Soybean Purchase at Premium: Pledge Fulfillment vs Economic Trade-offs

China’s November 18 purchase of at least14 cargoes (~1M tons) of US soybeans marks its largest since January 2025, driven primarily by political obligations to fulfill Busan summit pledges rather than economic efficiency [2,4]. State-owned COFCO Group executed the transactions, underscoring direct government involvement as private firms would likely avoid the premium [2,4]. The purchase addresses criticism over slow prior imports (~332k tons vs 12M ton target) but still represents less than10% of the pledged volume [3,5].

• Political-Economic Trade-off
  : The $1-$1.15 per bushel premium over Brazilian soybeans highlights the priority of upholding summit commitments over cost [2].
• State Role
  : COFCO’s involvement confirms state-led execution to meet political goals [2,4].
• Partial Fulfillment
  : The purchase is a step toward the 12M ton target but leaves a significant gap, indicating potential for future buys [3,5].

• Risks
  : Chinese processors face higher input costs due to the premium, potentially pressuring margins [2].
• Opportunities
  : US soybean exporters gain a much-needed boost after declining sales to China in 2025 [3].
• Uncertainty
  : The gap between pledged and actual purchases may limit sustained market gains [2].

• China is the world’s largest soybean buyer (~60% global imports) [3].
• US soybean exports to China plummeted in 2025 due to tariffs, shifting ~70% of imports to Brazil [3].
• The Busan summit agreement committed China to buy12M tons of US soybeans by year-end [3,5].