Soybean prices may be on the rise, but industry observers warn that Canadian farmers will need more than that to return soybeans to the profitable staple crop they once were, after years of falling prices and rising diplomatic tensions that made the Chinese market effectively off limits.
Soybean futures trading on the Chicago Board of Trade hit a two-year high of US$10.43 a bushel at the end of last week, amid renewed buying interest from China, according to the Wall Street Journal. Soybean prices in Canada are based on those futures prices, but that doesn’t necessarily mean the recent rally will automatically translate into higher income for Canadian farmers.
tap here to see other videos from our team.
“Soybean farming is still in quite a challenging position,” said Marc Desormeaux, a senior economist who leads the Bank of Nova Scotia’s commodity market coverage.
Challenges have been stacking up for Canada’s soybean sector since 2018, when the U.S. trade war with China led to tariffs on U.S. soybeans and drove down prices on the Chicago Board of Trade. In early 2019, China’s imports of Canadian soybeans slowed to a trickle in what was seen as retaliation for the arrest of Huawei Technologies Co. Ltd. executive Meng Wanzhou in Vancouver.