CHICAGO, Feb 18 (Reuters) – A discussion about global soybean exports cannot proceed without mention of Brazil or the United States, because together they fuel 85% of total shipments each year.

Likewise, “China” and “imports” are often synonymous in global soybean trade because the country accounts for more than 60% of annual imports.

But what about the other customers? Who takes in the other 40% of soy cargoes, and how have these trends changed in recent years, especially with respect to each supplier?

This conversation has been pulled to the forefront of the market as the United States has threatened tariffs on many of its trade partners, who are contemplating measures of their own. This includes both Mexico and European Union countries, top destinations for U.S. farm goods.

At the same time, Brazil’s ballooning soybean crop has been increasingly able to supply global needs, slowly chipping away at U.S. soy exporters’ relevance.

Quick China Recap

China significantly reduced its reliance on U.S. soybeans during the first trade war in 2018, though that was largely possible at the time because of widespread disease throughout its hog herd, which significantly dented feed demand.

But for U.S. exporters, the pre-trade war levels were never restored, and U.S. soy shipments to China over the last three calendar years have fallen 12% from the 2015-2017 average. China increased its imports by 13% during that time.

Also during this time, Brazil expanded its soy exports to China by 51%, less than the 61% rise in the country’s total shipments. By comparison, U.S. soy exports to all destinations declined 2% in the same period as the focus on domestic demand increased.

On average over the last three years, about 72% of Brazil’s soy exports headed to China, compared with 76% between 2015-2017. This huge dependence on a single customer is perhaps the biggest vulnerability of Brazil’s export program.

About 53% of U.S. soy exports were destined for China over the last three calendar years compared with a three-year, pre-trade-war average of 59%.

Total Brazilian soy exports are nearly 80% larger by volume than their U.S. counterparts, but both countries over the last three years exported similar volumes to destinations other than China and the EU. This relatively greater diversity among the United States’ customers might be its only present advantage over Brazil’s booming business.

The future of U.S. soy exports could become less worrisome if domestic demand were to escalate in a manner implied by the aggressive biofuel mandates floated a few years ago.

But those plans, much like the tariff discussions, are in a holding pattern for now. This means that if the upcoming U.S. soy crop is not sufficiently large, next season’s shipments could be squeezed further.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.