CHINA – The world’s largest soybean consumer, China has proposed a “soybean industry alliance” with Russia as it seeks to ensure an ample supply of soybeans in the foreseeable future.
China’s Commerce Minister Zhong Shan has called upon both countries to “match up” production with that of major soybean production areas and build an industry alliance, reports South China Morning Post.
Although Russia is not a major soybean producer, climate change is bringing more land into production in the country’s northern region, making a likely increase in output likely in years to come.
The alliance proposal comes after China and Russia, which currently accounts for less than 1% of China’s imports, signed a cooperation agreement on soybeans in 2019, with the intent to increase imports from Russia to at least 3.7 million tonnes by 2024.
Also, the proposal comes at a time when relations between China and the United States, who has been for many years China’s top soybean supplier, have become increasingly strained.
However, the country has indicated that it would continue to increase its soybean purchase from the USA under the phase one trade deal, and they would drive up the total soybean imports in the second half of the year.
The United States and Brazil currently supply about 90% of China’s soybean imports i.e. 80-90 million tonnes a year.
According to recent data, China imported a total of 10.09 million tonnes of soybean in July 2020 as strong demand from the livestock sector continues.
However, Chinese purchases of US soybean were down in July 2020 compared to the previous year and month.
China imported 38,331 tonnes of US soybeans in July 2020, down from 911,888 tonnes in July 2019.
On the other hand, cheap prices and increased production pushed China’s Brazilian soybean purchases to 8.18 million tonnes in July, Reuters reported.
China consumers an average of 110 million tonnes each year, but its domestic production is only about 16 million tonnes annually with the deficit topped up by imports
But reliance on imports from individual countries is a risk to food security, and thus China is seeking to diversify suppliers while increasing domestic soybean production.
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