Chinese soybean imports are expected to fall by 10 percent to 85 million tonnes in 2018/19 from last year, due to the country’s 25 percent import tariff on US soybeans and an outbreak of African Swine Fever, according to the latest data from the USDA Foreign Agricultural Service. While US soybeans will remain price competitive in China even with the tariffs, many Chinese buyers do not want to risk administrative issues that might delay soybean delivery from ports. In lieu of US volumes, Chinese officials have been selling off more domestic reserve soybeans at auction with a cumulative sales volume of 1.92 million metric tonnes as of October 24th. To make up for reduced soybean meal, livestock growers have reduced the feed-protein ratio and substituted other feeds, including rapeseed, sunflower seed, and fish meals.
China’s domestic prices of soybeans and soybean meal have been moving upward since July, and increased sharply in October. Spreading African Swine Fever will not likely reduce pork production output in the short term, but herd sizes over the long term will shrink as a result of the outbreak. As the supply and demand paradigm of imported soybeans into China shifts, turn to Gro Intelligence for up-to-date data and analytics.
As soybean imports decline, China has been drawing down its soybean stocks to feed its booming pork industry.