China's rising dependence on imports affect domestic soy producers

China's rising dependence on imports of soy has been hurting the industry and farmers' benefits, according to Wang Xiaoyu, associate secretary-general of the Heilongjiang Soy Association.

According to a report from the National Grain & Oil Centre, the amount of domestically-produced soy may reach 14.5 million tonnes this year, but the country still needs to import 47.5 million tonnes raising the dependence on import to 76%, higher than last year's 72%.

Shang Qingmin, director of the centre pointed out that the main reason for this dependence is the increase of demand for vegetable oil in the country; on the other hand, the domestic market is unable to meet the demand.

It is predicted that in 2010, the demand for vegetable oil in the country may reach 23.80 million tonnes, but the domestic market only has the capacity to produce 19.87 million tonnes, therefore, in order to meet this demand, the rest should be imported. Demand for soyoil is predicted to reach 9.2 million tonnes, 700,000 tonnes more than last year.

Wang is concerned that the high dependence on imports might hurt the benefits of soy farmers in the country.

According to him, China had been a net exporter of soyoil until the mid-90s. Upon introducing the genetically modified (GM) method from abroad, due to its low prices and high rate of ingress of oil, the planting in north-eastern regions declined.

Chen Yangui, standing director of the China Soy Industry Association (CSIA), suggested that the country should give more subsidies to the soy industry, including farmers and manufacturers who still use the conventional way to produce oil.