April 5, 2010

 

China seen to restrict soy imports

China is expected to curb imports from Argentina, in order to save the domestic soy industry, according to trade representatives attending a government's meeting.

 

They did not say if soy from the US, another major supplier, would be subject to any restrictions.

 

Argentine soyoil imports with residual solvents of more than 100 parts per million (ppm) will be barred from the Chinese market, according to heads of domestic grain and oil giants attending a briefing given by the China Chamber of Commerce of Import and Export of Foodstuffs, Native Produce and Animal By-Products, which is affiliated with the Ministry of Commerce.

 

The move is to help domestic producers and in retaliation against Argentina, which has launched anti-dumping measures on goods from China, including tableware and textile threads, according to the trade group's vice chairman, Bian Zhenhu.

 

Soy is generally treated as an oil crop in China, not classified as grain, whose domestic production is under special protection for national security reasons. The latest measure on imported soyoil came amid ongoing concern that domestic soy production in China, the world's largest soyoil consumer, is under threat from imported soy.

 

China went from a major soy producer to the largest soy importer in 2002 when it abolished an import quota and tariff on soy. China consumes 40 million tonnes of soy annually. As much as 70% of China's edible oil market depends on imports from major soy producers in the world, including the US, Argentina and Brazil.

 

The China National Grain and Oil Information Centre reported China's 2009 imports of soy were about 42.5 million tonnes, up 13.5% from a year earlier. However, production of domestic soy is around 16 million tonnes.

 

Heilongjiang Province is a major soy production base in China. Wang Xiaoyu, vice secretary general of Heilongjiang Soy Association, said that the dominance of foreign soyoil suppliers in the Chinese market makes it harder for Chinese soy farmers to survive.

 

The Agriculture Commission of Heilongjiang Province announced recently that the planting area for soy in the province is expected to reach 65 million mu (10.6 million acres), down 5.6 million from a year earlier.

 

Imported soy is priced at RMB3,300 (US$483) per tonne, while domestic ones are priced at RMB3,700 yuan (US$541). Domestic oil refineries have to bear the economic losses if using domestic soy.

 

"The lower price, pushed down by excessive imports, dampens farmers' incentive to plant soy," Wang said. "To make it worse, the government's procuring procedures are often so complicated that farmers find it hard to find an effective channel to sell their produce."

 

He said he wished the government could reduce soy imports in the harvest season from October to April.