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August 6, 2018

 

China can reduce soybean imports by using soymeal substitutes

 

 

China, the world's largest soybean importer, will have to resort to soymeal substitutes so it can reduce its soybean imports. These substitutes include meal from rapeseed, cotton seeds, sunflower seeds and palm kernels, according to industry stakeholders, Xinhua reports.

 

The main reason cited why soymeal takes the lion's share of animal feed is its low prices. But as prices rise, these substitutes offer more economical options. Substantial import tariffs imposed by China on US goods including soybeans is seen to inflate costs for farmers and increase retail prices of pork, the nation's favourite meat.

 

Soybeans, crushed to make the protein-rich animal feed ingredient soymeal, as well as cooking oil, were the biggest US agriculture export to China last year at a value of US$12.3 billion, according to the US Department of Agriculture.

 

Li Qiang, chairman of Shanghai JC Intelligence Co. Ltd., was quoted as saying that Chinese imports of soymeal substitutes "have huge room for growth."

 

"If China increases imports of rapeseed by 2.5 million tonnes, meals from sunflower seeds by 3.5 million tonnes, and meals from palm kernels by 3 million tonnes this year, theoretically the country can reduce soybean imports by 6 million tonnes," Li said.

 

Soy self-sufficiency

 

Another option is for China to raise its capacity for soy self-sufficiency.

 

The Ministry of Agriculture and Rural Affairs said earlier this year that China's soybean planting area would increase by 666,667 hectares this year.

 

Fu Tingdong, professor at Huazhong Agricultural University, also said 4 million hectares of idle arable land and tidal flats in the Yangtze River Basin could be used for planting soybeans.

 

China is also promoting the low-protein feed technology in raising pigs and chickens, according to the Xinhua report.

 

It cited research done by Yin Yulong of the Chinese Academy of Sciences that showed that pork output and quality is not affected by lowering the share of protein in animal feed if four specific amino acids are added at different stages of animal growth.

 

Enough amino acid production capacity

 

China has sufficient amino acid production capacity, and using low-protein feed formula could reduce the country's demand for soymeal by 5 to 7%, or about 5 million tonnes of soybeans, according to Zhang Haitao, who is in charge of technology at Guangdong Evergreen Feed Industry Co. Ltd.

 

Soybean demand from China's breeding industry has in fact been reportedly weakening partly due to losses incurred by China's breeding industry since March. In the second quarter, soymeal consumption in China dropped 1.3% year-on-year.

 

Analysts forecast that soymeal demand will continue to fall in the next few months, as per Xinhua report.

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