Zero Soy to China, New Lows in BOPO, and a Tariff Threat at the IMO

China’s retreat from U.S. agriculture is accelerating. After already pivoting away from U.S. soybeans—zero shipments in June and July for the first time since 2004—Beijing has now slashed cotton imports as well. U.S. cotton shipments to China in 2024/25 collapsed 83%, with China’s share of exports plunging from 39% to just 6%. Reports of fresh Chinese purchases of Argentine soybeans only underscore the message: Beijing is actively diversifying away from the U.S. farm belt, leaving exporters dangerously exposed.

US Cotton Exports

The policy backdrop just turned even more combustible. Washington is pressing other countries to reject the UN/IMO ship-fuel emissions framework and has warned it is ready to use tariffs, visa restrictions, and port levies if the deal advances at October’s extraordinary IMO session. The U.S. had already pulled out of the talks, arguing the measures would burden shippers with little climate benefit. Besides the diplomatic blowback, this stance is strategically odd: with one of the smallest national fleets, the U.S. would likely have been a relative beneficiary of stricter global standards.https://www.reuters.com/legal/litigation/us-tells-countries-reject-un-ship-fuel-emissions-deal-or-face-tariffs-sources-2025-09-03/

Prices and spreads are confirming the stress. BOPO (bean oil vs. palm) has slid to fresh cycle lows near ~$80/mt, down from >$200/mt earlier this summer—an unmistakable sign of softer edible-oil demand and thinner biofuel premia. In Europe’s ARAG barge window, activity was decent but disciplined: FAME fixed around +685 $/mt over ICE gasoil, RME ~+737, UCOME ~+811. Gross margins remain positive—RME ~$173/mt, F0 ~$72/mt, UCOME ~$256/mt—but momentum has stalled, and buyers are no longer chasing paper.

Bean Oil / Palm Oil spread in $ per MT

The U.S. picture is mixed. D4 RINs are steady around $1.05. Yet under the surface, the industry is tightening its belt on both traditional activity and biofuels: both ConocoPhillips and Chevron are executing aggressive staff reductions of 20–25%—moves widely viewed as tied to biofuels exposure, echoing Shell’s retrenchment in the Netherlands. The signal from the integrated oils is clear: brace for leaner times and capital selectivity.

For traders, the implications are sobering. China’s decoupling looks structural, not episodic, and it now intersects with a hard-edged U.S. trade posture at the IMO. Collapsing BOPO, cautious ARAG prints, range-bound RINs, and big-oil retrenchment point to a synchronized squeeze on U.S. agriculture and biofuels. This is no longer an isolated trade spat—it’s a coordinated pressure campaign unfolding across policy, prices, and procurement.