Soybean prices didn’t suffer major fluctuations in 2018, despite the significant cuts of imports from the US due to the trade spat, according to the Ministry of Agriculture and Rural Affairs.
Prices of imported soybeans increased from 3.34 yuan ($0.49) per kilo in January to 3.54 yuan ($0.52) per kilo in November, an increase rate of 6 percent, and fell to 3.42 yuan ($0.50) per kilo in December.
This was thanks to the various measures taken by government departments and enterprises to alleviate effect of imports from the US on soybean prices. Steps included increasing imports from alternative sources, such as Brazil and Argentina, and transforming feed mix, say, replacing soybean with other substitutes to reduce demand. It is estimated that Argentine soybean output will increase by 17 million metric tons in 2019 compared with 2018.
China is heavily reliant on soybean imports, more than 80 percent of soybean consumption are imported, and imports are mostly used to feed animal or produce vegetable oil.
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China’s soybean imports in 2018 was 88 million metric tons, decreasing by 7.9 percent from the previous year, according to the General Administration of Customs. And in 2017, increase in soybean imports hit 15 percent year-on-year, with the biggest source Brazil, and US second.
Soybean imports from the US fell drastically in 2018 following China’s imposition of an addition tariff of 25 percent in July as an retaliatory measure against US tariffs on Chinese products. Soybean imports from the US decreased by more than 10 million (around 30 percent) due to the trade dispute. While imports from Argentina and Brazil greatly increased.
Confronted with a fall in soybean imports, China’s poultry and husbandry industry replaced soybeans with lower protein content to feed animal, in an effort to fill the gap.
It is predicted that the use of lower protein-content feeds can serve to reduce the demand for soybean imports, for example, for the pork industry alone, by about 10 million tons per year, according to National Research Center for Feed Engineering Technology.
There were outbreaks of African swine fever across China in 2018, but this did not cause big fluctuations in pork prices, annual average wholesale prices fell by 12 percent from 2017.
As to pork supply, monitoring shows a decline in live pig stock, which is predicted to likely cause a price rise in latter half of 2019. Pig farmers are suggested to moderately increase their stock.
It is forecast that China can have an adequate source of soybeans, based on reasons such as stable output of Brazil and Argentina, adequate soybean stock of American , and an increase in domestic planting.