June 8, 2012

China's soy land shows sliding trend

In recent years, the soy planting acreage of China has displayed a declining trend.

The country is increasing its dependence on soy and edible oil imports. Against the backdrop of foreign giants controlling domestic soy and cooking oil market, China is taking steps and also making studies to improve self-sufficiency of edible oil.

Diversifying the variety of oilseeds, fostering home firms and improving soy planting profit are main ways China is exploring to raise its edible oil self-sufficiency.

China's edible oil market is largely supplied with soy oil. About 23 million tonnes of soy oil is needed each year to satisfy domestic demand while the supply shortfall is 10 million tonnes. Currently, the country has around 60% of its edible oil consumption and over 40 million tonnes of soy consumption depend on imports every year, with the edible oil self-sufficiency rate only at 37.5% and displaying a decline trend.

At present, Yihai Kerry Group, a joint venture owned by Singapore Wilmar International and the US ADM, is the biggest cooking oil producer in China, taking up 45% of the domestic edible oil market share. Two leading native producers, COFCO Group and Shandong Luhua Group Ltd, which take the second and third position on the domestic market, only clinch a market share of 15% and 7% respectively.

The State Forestry Administration (SFA) said at a press conference held at the beginning of this month that China has built a batch of high-yield woody grain and oilseeds production bases to ease shortage of domestic edible oil supply.

Wang Xuan, director of forest resources management department under the SFA, noted that the country had established tea-oil tree bases in Jiangxi and Hunan provinces and also built chestnut and walnut bases in northern areas.

Such a move is aimed to relieve oilseeds production's pressure on arable land and will also help stabilise edible oil supply and reduce dependence on imports, according to Wang.

According to Wang Ruiyuan, director of Oils and Fats Department under the CCOA, the paddy recycling economy developed by Jinlongyu represents a new trend for the oilseeds industry development and will help push forward reform in domestic edible oil production to relieve excessive dependence on imported oilseeds.