China’s soybean imports in July 2018 registered about 8 million tons, down by 20.6 percent year-on-year. Imports in the period of January to July totaled about 52.88 million tons, down by 3.7 percent year-on-year.

US Soybean Slump - US Soybean Slump Absorbable for Chinese Companies

Amidst the no-end-in-sight China-US trade war, many worry that the ongoing war can disrupt China’s soybean supplies. However, we can consider the worries are on a shaky ground by throwing a brief look at the statics regarding China’s soybean imports sources released by General Administration of Customs, P.R. China. In 2017, China’s soybean imports hit 95.54 million tons, among which, 52 million tons came from Brazil, accounting for 54 percent, 32.7 million tons from the U.S., claiming about 34 percent, and imports from Argentina accounting for about 7 percent. It can be seen, Brazil is the largest soybean source for China, and Brazil government said that the country plans to increase its soybean exports from current 120 million tons to 156 million tons, with 70 percent of which targeting Chinese market.

china soybean supply 1 - US Soybean Slump Absorbable for Chinese Companies

According to the Ministry of Agriculture, in the period of May to August, South America exported to China more than 36 million tons of soybeans. And other shipments are scheduled to reach Chinese ports in November. However, Argentina doesn’t have a bumper year due to bad weather during sowing and harvest seasons of soybean, on top of which is a quite long summer drought, resulting in the total soybean yield this year reduced and is estimated at 36 million tons, suggesting that China’s imports from Argentina this year will see limited increase, if any. By the end of Sept., China has a surplus of soybean stocks of about 3 million tons. Many Chinese companies have enough stock for normal production even into early 2019.

Read Also: Brazilian Soybeans Premium to U.S. Soybeans Hits a Four-Year Top

Industry experts also suggest companies seek for alternative sources, such as sunflower seed, cottonseed, palm kernel to increase the proportion of other meals in the formulas, and correspondingly reduce the proportion of soybean meal as a feed ingredient by at least 3 percent, a figure currently stands at about 20 to 22 percent. Many Chinese companies are making efforts to update their formulas to reduce dependence on soybean.

COFCO, China’s biggest food giant in terms of revenue, said it plans to increase alternative meals for proteins, and has inquired on prices of vegetable, sunflower seeds and ccottonseeds in international market, such as India, Canada, Ukraine and other major producers, to deal with any possible soybean shortage if the trade spat continues.

Back in Asia, China is implementing the policy of zero tariff, formerly 3 percent, on soybean imports from some neighboring countries, such as India, Bangladesh, Laos and Sri Lanka. Diversification of soybean source plays to reduce our proportion of US soybean imports and make the US soybean slump more absorbable.

 

 

 

LEAVE A REPLY

Please enter your comment!
Please enter your name here