China is cutting domestic demand to reduce soybean imports, and it has also made other preparations in the face of an ongoing soybean standoff with the US, experts said Wednesday.
Photo: Global Times
According to data released by the General Administration of Customs on Wednesday, China imported 8.005 million tons of soybeans in July, down 20.6 percent from a year earlier and the lowest level since April.
A Reuters report said that China may have to resume buying US soybeans again in the coming weeks even if the current trade war is not resolved, citing Oil World, a Germany-based oilseeds analysis firm.
However, experts told the Global Times that China has enough soybeans in storage and would not seek US imports, given the escalating trade situation.
The soybean surplus is expected to be 80,000 tons and persist until September this year, data released by the China National Grain and Oils Information Center showed.
"The decrease in soybean imports is mainly arising from trade tensions between China and the US, and the volume of US imports might continue to drop if the trade situation gets worse," Jiao Shanwei, editor-in-chief of grain portal cngrain.com, based in Zhengzhou, capital of Central China's Henan Province, told the Global Times on Wednesday.
Jiao said that even if a sharp reduction in US imports unavoidably leads to a supply shortage, China has more than one way to fill the gap.
China imports 60 percent of the soybeans produced in the world, and it bought 32.9 million tons of soybeans from the US in 2017, accounting for 34 percent of the total purchases, Reuters reported.
"China is promoting the application of low-protein diet technology in the breeding of pigs and broilers to reduce domestic soybean demand," Jiao said, adding that about 80 percent of China's soybean imports are used for animal feed.
The new diets could reduce demand for soybean meal by up to 7 percent, equal to 5 million tons of soybean imports, the Economic Daily reported on Monday.
"In addition, China has been diversifying its soybean import sources since 2012. South Africa, Brazil and Argentina are ideal substitutes for the US," Jiao said.
China is also working on improving its soybean production ability. Some provincial governments have released measures to boost local soybean production in recent months. The northeastern provinces of Heilongjiang and Jilin have rolled out subsidies to encourage farmers to grow more soybeans, media reports said, with Heilongjiang set to increase the soybean cultivation area by 5 million mu (333,333 hectares).
Lü Guangyan, the head of a plantation in Heilongjiang, told the Global Times that 2018 would be a good harvest year and he is confident about the soybean production this year.
China's soybean output from October 2017 to September 2018 is expected to grow 12.8 percent year-on-year, according to a report by the Ministry of Agriculture and Rural Affairs.