Posted on November, 6, 2018 at 10:23 am
By Arvin Donley
BEIJING, CHINA — China’s soybean imports in 2018-19 are forecast to decline by 10% to 85 million tonnes due to ongoing trade tensions with the United States and an outbreak of African Swine Fever, according to a Nov. 2 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).
The bilateral trade dispute, which includes a 25% tariff on U.S. soybeans, has ignited efforts by China to reduce U.S. soybean imports and slash soybean feed use through reductions in feed protein ratio and the use of substitute protein meals.
“Although U.S. soybeans remain in a competitive price range even with the additional 25% tariff, many importers have shared that they are unwilling to risk facing possible administrative barriers to U.S. soybean imports at Chinese ports,” the USDA said. “Importers are also wary of making what may be perceived in China as a political statement in deciding to purchase U.S. soybeans during the ongoing U.S.-China trade dispute.”
Although the Chinese government has increased subsidies to producers, 2018-19 domestic oilseed production increased only 0.2% over the previous year to an estimated 58.95 million tonnes.
African Swine Fever, which was detected in China’s swine herds in August, is expected to temper feed demand, which, along with the Chinese government’s stated goal of reducing soybean consumption, will lead to a slight decrease in soybean meal demand in 2018-19. The USDA forecasts a decrease of 2.6 million tonnes to 66.6 million tonnes.
“Rapeseed meal, sunflower seed meal, and fish meal feed use will see moderate increases,” the USDA said. “Taken together, the reduction in soybean feed use and slight increases in other protein meals feed use will result in an overall soybean meal-equivalent use for feed of 85.9 million tonnes in 2018-19, a decrease of 1.7 million tonnes compared to the previous year.”
The USDA said 2018-19 soybean ending stocks are forecast at 20 million tonnes, slightly lower than the previous year based on the Chinese government’s resumption of sales from the soybean reserve and decreased imports.
Source: WORLD-GRAIN.COM