September 10, 2014
China's soybean crop to shrink as farmers switch to corn
Soybean output in China, the world's largest consumer, will fall more than forecast to the lowest in 22 years as farmers switch to corn, Oil World said.
The estimate is 11.7 million tonnes, down about 4% from last year and 10% below the crop two years ago, the Hamburg-based research company said in a report. The previous forecast was 11.8 million tonnes. The 2013 estimate was raised to 12.2 million tonnes from 12 million tonnes.
Soybean planting fell 7% this year while the corn area expanded to a record, with farmers claiming that with reduced soybean prices they cannot make a profit. Soybeans on the Chicago Board of Trade dropped 22% this year compared with an 18% decline in corn prices.
China's import dependence on oilseeds and products will continue to rise in 2014-15 and beyond, particularly if the alarming trend of shrinking oilseed plantings is not reversed, Oil World predicts.
By planting corn on the same fields year after year, more fertilisers are required because of soil degradation, raising production costs and making it more difficult for the government to reduce domestic corn prices without jeopardising the extent of corn plantings and production, Oil World said.