China’s soybean imports have peaked and will keep falling as Beijing stresses food security, report says
10 Jan 2023 (www.scmp.com) - China’s soybean imports appear to have already hit their peak level and will gradually decline through 2030 as Beijing continues its effort to double down on food security, according to a new report.
The country’s soybean imports declined by 8.1 per cent, year on year, during the first 11 months of 2022, according to data released by China customs last month.
Most of those imports comprised genetically modified soybeans from the United States, Brazil and Argentina, with Brazil being the largest supplier to China.
Brazil has been increasingly taking some of the market share of Chinese exports from the US since the US-China trade war began in 2018, when the share of Brazilian soybean exports to China exceeded 75 per cent while the US market share plunged to 19 per cent, according a report on Monday by Rabobank, a Dutch multinational banking and financial services company.
China is the world’s largest soybean importer, accounting for more than 60 per cent of global trade. In 2022, China imported an estimated 94-95 million tonnes of soybeans, the report said.
Close to 95 per cent of imported soybeans are for crushing to produce soy oil for cooking and soybean meal for animal feed.
“Soymeal is the key feed protein source in China, accounting for 70 per cent of volume as Chinese livestock farmers believed high-protein diets could ensure animal health and accelerate growth,” the report said.
However, China introduced the concept of low-protein feed formula in 2018 during the US-China trade war and in the face of uncertainties surrounding external supplies, and the Ministry of Agriculture and Rural Affairs continued to issue further guidelines to reduce soybean meal use in the last couple of years.
The Rabobank report said that China’s stepped-up effort to reduce its use of soybean meal was aimed at lowering the dependence on imported soybean to ensure food security.
Beijing has long placed an emphasis on national security, including in terms of food and seeds. The global price turbulence and looming food crisis stemming from the Ukraine war have served as further reminders to China that it should reduce its reliance on foreign markets for key crops and commodities.
The report added that China’s soybean imports peaked in 2020, and that the inclusion rate of soybean meal in feed rations is projected to drop from 15.3 per cent in 2021 to 13.5 per cent in 2025, and then to 12 per cent by 2030.
“A slowdown and eventual reduction in China’s soybean imports will reshape global trade flows,” the report said.
While China will remain the largest importer, additional growth will shift from China to other regions and mainly be driven by emerging economies in the Middle East, Southeast Asia, and South Asia.
The world’s second-largest economy has been increasing its support of research into unconventional protein feed, expanding production of microbial proteins, popularising low-protein animal diet technology, and increasing the supply of high-quality foraging grass, the agricultural ministry said in September.
China listed soybean expansion as “a major political task to be accomplished” in 2022. And Beijing hopes to raise domestic soybean output by 40 per cent to 23 million tonnes by 2025.
China’s domestic production of soybeans in 2022 was 20.28 million tonnes – a 23.7 per cent jump, year on year, according to annual data on national grain production, from the National Bureau of Statistics