China’s Growing Appetite For Soybean Imports

In 2015, whilst Chinese seaborne coal imports slumped and growth in iron ore imports slowed, China’s soybean imports continued to expand robustly. Growth in soybean imports so far in 2016 has remained firm, with total imports on track to reach almost double the 2009 level this year. This robust growth has been driven by a number of different factors over recent years.

What’s Cooking?

Chinese soybean imports have grown rapidly in recent years, rising from 30.8mt in 2007 to a record 81.4mt in 2015, having grown on average by 13% per annum. This expansion accounted for over 90% of growth in global seaborne soybean trade in this period. The US and Brazil are the largest suppliers of soybeans, and Chinese imports from both regions have increased significantly since 2007. However, in 2015, Chinese imports from the US fell y-o-y by 5% to 28.4mt, whilst imports from Brazil and Argentina rose by 25% and 57% respectively. The firm growth in imports from South America reflected strong soybean production in the region and increased competitiveness of South American grains compared to US crops due to currency fluctuations.

It’s Feeding Time

Overall, growth in China’s soybean imports has largely been driven by increasing demand for oilseed by-products. Most imported soybeans are crushed to produce soymeal, typically used as a livestock feed, and soy oil, commonly used in cooking and processed foods. In 2007-09, China’s feed demand increased, supported in part by a growing pig population, with the number of pigs increasing by 4% p.a. to reach 470m at the end of 2009. Total soymeal production grew from 31.3mt to 38.6mt during this period.

However, a combination of factors including outbreaks of swine fever, lower pork prices, closures of small pig farms, and lower output from large-scale farms subsequently limited growth in the Chinese pig population. This, combined with the impact of bird flu outbreaks on China’s poultry population in recent years has recently reduced domestic feed demand.

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However, despite this, soybean imports have continued to increase, with soymeal production growing at a fairly robust pace (output i…

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