The first state
soybean auction was held on 17th June, 2019 by the National Grain Trading
Center. According to the announcement regarding auction results released by
the National Grain Trading Center, the projected auction volume of state-stored
soybeans in 2013 was 300,008 tonnes. The actual turnover was 215,764 tonnes,
with a turnover ratio of 71.91%. The average transaction value was USD452.13
per tonne.
China
decreases amount of imported soybean
In
May, China imported 7.362 million tonnes of soybeans, which was less than the 8
million tonnes predicted by the market. China has imported 31.75 million tonnes
of soybeans in total from January to May, which is a decrease of 12.2% compared
to the same period last year. The Supply
and Demand Estimates Report of the USDA in June revealed that China is
estimated to import 87 million tonnes of soybeans from 2019 to 2020, which is
the same as the predictive value from May. However, the predictive value of
imported soybeans from 2018 to 2019 in China has been cut down to 85 million
tonnes, a reduction of one million tonnes compared to May and 3 million tonnes
compared to April.
According
to the Monthly Supply and Demand Estimates Report of China’s Ministry of Agriculture, the
production of Chinese soybeans will have reached 17.27 million tonnes from 2019
to 2020, up from 16 million tonnes last year with a growth of 7.94%, which has
set the highest level since 2004. This is because China is improving domestic
production of soybeans, with 9.07 million hectares of estimated planting area,
up from 8.4 million hectares in 2018.
Due
to the effect of the African Swine fever virus, the demand for soybean oil
by-products is limited. China’s Ministry of Agriculture expects that 86.6
million tonnes of soybeans will be used for oil extraction, which will remain
stable compared to last year. From 2019 to 2020, China will import about 84.9
million tonnes of soybeans which will also remain stable compared to 2018. It
was estimated that 103.56 million tonnes of soybeans were consumed in the year
of 2018. China’s Ministry of Agriculture also claims that the supply of
soybeans in the international market is estimated to be sufficient in the first
half of 2019. Even though the soybean production from Brazil is expected to
drop, the supply from the USA and Argentina is sufficient. This year Brazil’s
soybean production is estimated to decrease to 115 million tonnes, a reduction
of over 8 million tonnes from last year.
China
plans to expand soybean planting area in the Northeast and East of Mongolia
China
and America continue to negotiate in trade discussions and have made little
progress toward compromise. Both sides need to continue to negotiate. Aggrandized
claims about America imposing tariffs on Chinese products within the market,
especially claims within the market for Chinese plant oil by-products, will
continue. The American government issued the details
of Agricultural Subsidy, saying that a total of 16 billion dollars will be
funded to farmers so as to make up for their losses because of trade disputes
between China and the United States and farmers will be subsidized depending on
their total planting area.
According to the report from China’s Ministry
of Agriculture and Rural Affairs, with the promotion of Soybean Revitalization
Program, the planting area for soybeans will expand to 9,066 hectares, an
increase of 7.93% from last year, and the projected soybean production is 17.27
million tonnes, a growth of 7.94% from last year. The data from China’s Statistical
Bureau shows that the soybean intentional planting area in China this year will
increase 16.4%, among which the intention of expanding soybean planting area
goes more to the three northeastern provinces, namely Jilin, Heilongjiang, and
Liaoling, and the east of Mongolia, with an increase of 37.0%, 28.4%, 14.2% and
14.1% respectively.
The soybean sprouts
grow better in the Northeast producing area. This is because the sunny and
rainy weather in the Northeast makes it suitable for planting soybeans. With
the subsidy program for planting soybeans issued by the Chinese government,
farmers’ passions for planting soybeans are enhanced. The soybean planting area
in other places also increase with different levels. According to China’s
Ministry of Agriculture and Rural Affairs, Chinese soybeans own their
characteristics and strengths and as a result, the market for Chinese soybeans
will be developed moderately depending on consumers’ needs. However, the
soybean supply in China is still import oriented, and America is still one of
its important partners in the international soybean market.
For more information about China's soybean market, please have a look at our monthly newsletter Crop Farming China E-News.