China is entering what is typically its top buying season for U.S. soybeans, a critical source of protein in livestock feeds, and the higher tariffs, part of an escalating Sino-U.S. trade war, could drive up prices.
China’s Feed Industry Association wants to limit the amount of crude protein and total phosphorus in feeds for pigs, layers, and white feathered broilers at different growth stages, to “reduce consumption of raw materials for feed, and reduce environmental pollution from animal farming,” according to a draft document published on the semi-official industry group’s website in late September.
The current guidelines only have recommended minimum levels of protein for livestock feeds.
“If the new guidelines get implemented, the amount of soymeal used in feed will drop as now there would be a cap for protein levels,” said a manager at one of China’s major feed producers.
Under the proposed guidelines, for example, farmers were advised to feed their pigs weighing over 100 kilograms till they go to the slaughterhouse with feeds containing 10-12.5 percent of protein, according to the document.
That would be lower than what Chinese farmers usually feed their grown pigs, which is 13-14 percent of protein, according to experts.
The association has sought public opinion for the proposal that needs to be completed by Oct. 15. The guidelines will need approval from the Chinese government before being implemented.
Beijing imposed 25 percent tariffs on $34 billion worth of U.S. products including soybeans on July 6, in response to U.S. tariffs on Chinese goods of the same amount.
The world’s top consumer of the oilseed is seeking various ways to cut soymeal in animal feed including turning to alternative meals and reducing protein levels.
“China faces feed resources shortage and has been relying on imports for feed proteins for long, which has become a bottleneck that hinders the development of our feed industry and animal farming,” according to the document.
With soymeal prices soaring on trade war worries, analysts say Chinese farmers and feed producers will be more motivated to cut soymeal use in animal feed.
Chinese soymeal prices have jumped 20 percent since early June, to a record high of 3,539 yuan ($511) per ton on Thursday.
