January 11, 2023

 

Soybean imports from China have peaked, expected to decline to 2030

Soybean imports from China have appeared to hit their peak level, and is expected to steadily drop until 2030 as the country doubles down on food security, South China Morning Post reported.

 

According to data released by China's customs last month, imports of soybeans decreased by 8.1% year-on-year during the first 11 months of 2022.

 

The majority of those imports came from Brazil, Argentina, and the US, with Brazil being the main supplier to China.

 

Since the US-China trade war started in 2018, Brazil has been steadily capturing China's market share from the US. At that time, Brazilian soybean exports to China exceeded 75%, while the US market share fell to just 19%, based on a report by Rabobank.

 

China imports more soybeans than any other country in the world, making up more than 60% of all trade. The Rabobank report said China imported between 94 million and 95 million tonnes of soybeans in 2022.

 

In order to make soy oil for cooking and soybean meal for animal feed, nearly 95% of imported soybeans are crushed.

 

The report also showed 70% of China's feed protein comes from soybean meal because the country's livestock farmers thought high-protein diets could promote animal health and growth.

 

However, amid the US-China trade war and supply-chain uncertainties in 2018, China introduced the idea of low-protein feed formulas, and the country's Ministry of Agriculture and Rural Affairs has since continued to issue new recommendations to cut back on the use of soybean meal.

 

The Rabobank report said China's increased efforts to cut back on the use of soybean meal are intended to lessen the country's reliance on imported soybean to maintain food security.

 

Beijing has long prioritised national security, which includes access to food and seeds. China should lessen its reliance on foreign markets for important crops and commodities, as evidenced by the current price volatility around the world and the impending food crisis brought on by the conflict in Ukraine.

 

The report showed China's imports of soybeans reached their peak highest in 2020. It is anticipated that by 2030, only 12% of feed rations will contain soybean meal, down from 15.3% in 2021 and 13.5% in 2025.

 

The report said thata slowdown and eventual reduction in China's imports of soybeans will reshape global trade flows.

 

Even though China will continue to be the world's largest importer, additional growth will move away from China and be primarily driven by developing nations in the Middle East, Southeast Asia, and South Asia.

 

In 2022, China listed the expansion of the soybean market as a major political task to be accomplished. Beijing aims to increase domestic soybean production by 40% to 23 million tonnes by 2025.

 

Annual data on national grain production from China's National Bureau of Statistics showed the country produced 20.28 million tonnes of soybeans domestically in 2022, an increase of 23.7% year-on-year.

 

-      South China Morning Post