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China’s 2016-17 soy imports to prove higher than thought

Zoom in font  Zoom out font Published: 2016-03-25  Views: 6
Core Tip: China’s soybean imports will prove more buoyant than initially expected next season, US officials said, citing “unrelenting growth” in oilseeds demand, and limited knock-on effects on sowing of farm subsidy shake-ups.
China’s soybean imports will prove more buoyant than initially expected next season, US officials said, citing “unrelenting growth” in oilseeds demand, and limited knock-on effects on sowing of farm subsidy shake-ups.

China, the world’s top soybean buyer, will import a record 84.5m tonnes of the oilseed in 2016-17, on an October-to-September basis, the US Department of Agriculture’s Beijing bureau said.

The estimate is above the 83.0m tonnes forecast by the USDA last month in a report on long-term agricultural projections, which were also relatively downbeat on Chinese imports this season.

“Soybean imports are expected to continue on an upward trend,” the bureau said flagging “strong” demand from crushers, whose profit margins have “improved slightly” after a spree of nine successive months of decline.

Furthermore, food use of imported soybeans, for making the likes of tofu and soy milk, is increasing in coastal areas, thanks to “price advantage and purchasing convenience” of bought-in supplies.

‘Unrelenting consumption growth’

“Chinese consumption of… vegetable oils and soybeans for food-processing continues its unrelenting growth, fuelled by rising affluence, urbanisation, and expanding consumer preferences,” the bureau said, forecasting a rebound too in the country’s rapeseed imports, of 300,000 tonnes to 4.5m tonnes.

Palm oil imports were seen nudging higher by 50,000 tonnes in 2016-17 to 5.65m tonnes.

However, the growth in oils and oilseed demand comes at a time when China’s own soybean production remains depressed, largely thanks to relatively meagre subsidies for growing the oilseed, compared with rival crops such as corn and rice.

In Heilongjiang, the largest soybean-producing province, farmers last season took profits of 465 renminbi ($75) per hectare, excluding labour costs, from growing the oilseed – compared with 3,045 renminbi ($491) per hectare for corn, and 4,905 renminbi ($791) per hectare for rice.

Corn vs soybeans vs potatoes

While China has revised its corn subsidy strategy in an effort to cut sowings in 13 major growing provinces, including Heilongjiang, by 3.7m hectares by 2020, in a drive to reverse a trend of stockpiling, the shake-up will not see a wholesale switch by farmers to planting soybeans instead.

The bureau forecast soybean sowings for this year’s harvest rising by some 100,000 hectares to 6.2m hectares.

“The profit gap between corn and soybeans is expected to be smaller than the previous year and likely to encourage a modest increase in soybean acreage in the north eastern provinces,” the bureau said in a report.

However, “corn profits are still high”, while the likes of potatoes and silage will also compete with soybeans for what acreage is switched from the grain.

‘Major impediments’

The bureau forecast China’s soybean harvest this year at 11.2m tonnes, a rise of 200,000 tonnes on its estimates but still the second lowest in 24 years.

The report added: “Soybean farmers continue to struggle to boost yields and productivity which have remained constant for several years,” averaging 1.8 tonnes per hectare over the past three years, compared with 2.9 tonnes per hectare in the US.

“Without access to the latest seed technology, Chinese soybean farmers face major impediments to improve productivity, including small farm scale and inadequate agronomic practices, such as the lack of proper crop rotation, which are unlikely to change significantly in the near future.”
- See more at: http://ingredientnews.com/articles/chinas-2016-17-soy-imports-to-prove-higher-than-thought/#sthash.oUGXGUIb.dpuf
 
 
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