As the U.S. and China continue to negotiate a trade deal aimed at satisfying both sides, soybeans are emerging as a bargaining chip for Beijing to use as leverage in those talks.
But while Beijing has pledged to buy more American soybeans, analysts question if China — the world's largest consumer of the oilseed — has the appetite for it.
In addition to tariffs brought on by the ongoing trade dispute, falling import numbers and an outbreak of African swine fever in China have added to concerns that the world's second largest economy may not be able to live up to its pledges to buy more.
According to U.S. Agriculture Secretary Sonny Perdue, China has committed to buying an additional 10 million metric tons of U.S. soybeans. Beijing has also reportedly offered to purchase more than $30 billion in American agricultural produce a year as part of a trade deal.
However, customs data show that soybean imports have been falling in recent months.
Last year, China's soybean imports from the U.S. hit its lowest in a decade. More recently, customs data showed that soybean imports in February fell to their lowest monthly level in four years — or 17 percent lower than a year ago, in part due to heavy tariffs on American soybeans.
"The trade conflict will certainly be playing an important role because China will no doubt have imported significantly fewer soybeans from the U.S.," Commerzbank analysts wrote in a note on Friday.
"U.S. export figures had already raised doubts about whether China would buy the promised 10 million tons of soybeans in the U.S. These doubts have not been reduced by (February's export) data from China," the bank's analysts added.
African swine fever outbreak
To make matters worse, China is also grappling with an outbreak of swine fever, which has dragged down its soybean demand as the oilseed is used for animal feed.
Since August, China has reported 111 outbreaks of African swine fever in 28 of its provinces and regions. About 1 million pigs have been culled so far in an effort to try to control the spread of the disease, according to a Reuters report. There is neither cure nor vaccine for swine fever, which is highly contagious and fatal to pigs, though it does not affect humans.
China's pig herd fell 13 percent in January compared with the same month a year earlier, while the number of breeding sows was down 15 percent from the previous year, according to data from the Ministry of Agriculture and Rural Affairs.
"The swine (fever) will take demand out; you can't make up for the lost pigs right now," said Darin Friedrichs, risk management consultant at INTL FCStone's Asia commodities division.
Friedrichs told CNBC there was little clarity on when the virus will come under control, and that importers and soybean users in China will be nervous about restocking on soybean feed until they are confident.
Besides, there are still large soybean stockpiles globally, Friedrichs added.
Trade uncertainty
Another important reason why investors have not rushed to buy soybeans is because there's "some skepticism about the substance of any (trade) deal," wrote Caroline Bain, chief commodities economist at Capital Economics.
In 2017, the U.S. exported $40 billion worth of grains and soybeans, of which China accounted for $15.5 billion, she noted.
If Beijing were to spend an additional $30 billion that it reportedly pledged for U.S. soybeans and grains, it will have to spend three times more than the $15.5 billion it spent on American agricultural exports in 2017 before tariffs kicked in.
That would be "difficult to achieve," Bain said in a recent note, adding that China has little appetite for other grains from the U.S., as its imports of wheat and corn are "tiny" and the country is essentially "self-sufficient."
"Meanwhile, the US already provides 85% of China's sorghum imports," Bain added, leaving soybeans from America as the only thing that matters.
Despite analysts' reservations about Chinese demand for soybeans, however, Beijing last week raised its forecast for soybean imports for the 2018-2019 crop year to 85 million metric tons — up from its previous 83.65 million tons in last month's outlook.
It came after China suspended imports of canola from a Canadian company. Canola is a common alternative to soybeans.
— Reuters contributed to this report.
Correction: This article has been updated to reflect that an outbreak of African swine fever in China led to the culling of pigs there.