Insight Focus

The US shutdown and new China port fees cause trade disruptions. The escalation in tensions is the clearest sign yet of a protracted battle between the two superpowers. Commodity volatility continues as cocoa prices collapse, grain markets shift and climate pressures affect agriculture.

US Government Shutdown Halts Data

The ongoing US federal government shutdown has cut off the flow of essential agricultural and commodity data, leaving global grain and oilseed markets without key benchmarks during the height of the autumn harvest.

The suspension of the USDA’s WASDE report, weekly export sales reports, and the Commodity Futures Trading Commission’s market position data has created a significant information gap at a critical point in the season.

Analysts warn that when USDA data finally resumes, markets could face a sharp correction as traders recalibrate positions based on new official figures. The data blackout increases the risk of volatility and market distortion, as traders navigate incomplete information and reassess exposure. The absence of authoritative USDA figures has underscored the system’s dependence on reliable public data to maintain confidence and stability in global agricultural trade.

US-China Port Fee Standoff

There has been another escalation in US–China trade tensions. Beginning October 14, the US will impose new Section 301 port fees on ships built, owned, or operated by Chinese entities — a policy expected to cost the world’s top 10 carriers an estimated USD 3.2 billion over the next year, according to S&P Global.

The US Trade Representative has positioned the measure as part of a broader effort to counter China’s dominance in global shipbuilding and to channel revenue toward reviving the domestic maritime industry. Vessels owned or operated by Chinese entities will face a flat USD 80/net tonne per voyage to US ports, while non-Chinese operators using Chinese-built ships will pay the higher of USD 23/net tonne or USD 154/container, capped at five calls per year.

The rule has already prompted significant fleet adjustments, with carriers such as COSCO and OOCL among the most exposed — potentially facing more than USD 1.5 billion in annual costs. Some operators, including CMA CGM, have redeployed Chinese-built vessels to other routes to limit exposure. Beijing has announced reciprocal port charges on US-linked ships, while Premier Li Qiang has pledged additional countermeasures against what China calls “discriminatory” treatment.

While the fees were eased from initial proposals following industry pushback, they still mark a major new cost burden amid already fragile shipping economics.

Cocoa Prices Collapse after Rally

Cocoa prices have fallen to a 20-month low, ending a two-year rally that had significantly impacted chocolate manufacturers. New York cocoa is trading around USD 6,150/tonne, down from a December peak above USD 12,000, while London prices have dropped roughly 58% from their April 2024 high.

The decline is driven by weaker consumer demand, improved weather conditions, and higher state-guaranteed prices in West Africa, which have raised expectations of a larger 2025–26 harvest. Governments in Ivory Coast and Ghana, which together produce about 60% of global cocoa, have increased the prices they pay farmers, encouraging more official sales, fertiliser use, pruning and tree replacement.

Despite the price drop, structural risks—including ageing trees, crop disease, and climate volatility —remain, making a return to pre-2023 price levels unlikely.

Diseased Cocoa Plant

The price decline may provide relief to chocolate manufacturers but is likely to squeeze producer margins, highlighting how sensitive high-value tropical commodities are to demand shifts.

Grains Prices Increasingly Volatile

Corn markets remain under pressure as delayed harvests in Ukraine and strong competition from the Americas drive price swings. Cold, wet weather has slowed Ukrainian fieldwork, with only around 5% of corn harvested by late September compared to nearly a quarter a year earlier.

Yields are lower, and while ports have begun receiving new-crop grain, weak export demand has pushed prices down to about USD 205–207/tonne. Meanwhile, abundant US and Argentine exports are weighing on global values. US corn shipments are up more than 50% year-on-year, pushing futures lower and squeezing Ukrainian exporters out of the EU market.

Global soybean trade remains unsettled as the US continues to struggle to replace lost Chinese demand. With tariffs making US beans uncompetitive in China, exporters have turned to smaller markets such as Vietnam, Bangladesh and Nigeria. These new buyers, however, account for only a fraction of China’s former purchases, leaving overall US exports lower and prices near multi-year lows. Many farmers, particularly in Illinois, are storing crops in hopes of a recovery, but trade diversification efforts have yet to offset the loss of their largest market.

Source: USDA

Wheat flows are also shifting as Bangladesh deepens ties with the US through a government-to-government deal for 220,000 tonnes of US wheat at USD 308/tonne. The agreement, part of a five-year plan for up to 700,000 tonnes annually, aims to reduce Dhaka’s reliance on cheaper Black Sea supplies and improve trade relations with Washington. For the US, the deal reflects a broader push to open new markets as global competition intensifies.

India’s edible oil imports highlight changing dynamics in the oilseed complex. Palm oil arrivals fell 16% in September to 829,000 tonnes—the lowest since May—as refiners switched to cheaper soy oil, imports of which surged nearly 37% to a three-year high. The shift is expected to pressure Malaysian palm oil futures while lending support to US soy oil prices. India, the world’s largest buyer of vegetable oils, bought record amounts of soy oil from Argentina after export taxes were lifted, showing how prices and policies are reshaping global oilseed trade.

Source: Global Trade Tracker

Food and Feed Markets Adapt

In the UK, over 7 million tonnes of wheat have been lost since 2020 due to droughts and floods, reducing self-sufficiency from 96% to 79% and forcing millers to rely on record imports. 2025 is expected to be another poor year, with hot, dry weather and irrigation restrictions hampering planting and growth. Long-term projections indicate continued extremes in rainfall and droughts, challenging domestic agriculture and food security.

Source: Defra

Across the Atlantic, the US has seen cattle prices rise by nearly 33% year-on-year as drought and high input costs shrink herds and reduce slaughter rates. Beef imports increased about 16% in H1 2025, adding pressure on retail prices. Farmers are holding onto livestock, anticipating further price gains, while processors and retailers face higher costs.

Source: USDA

In Other News…

  • Europe to Import More LNG This Winter: Europe will need up to 160 extra shipments of liquefied natural gas (LNG) this winter as pipeline supplies from Russia and Algeria fall and storage levels are low. The region is relying more on US LNG, which could make prices more sensitive to global demand and shipping costs.

Source: GIE AGSI

Lucas Blaxall

Lucas joined CZ in August 2024 after graduating from Queen Mary University of London. He works on the advisory team, contributing to managing and editing content across all of CZ’s digital platforms.

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