China’s soybean production to reach 18MMT in 2020/2021 as demand rises

CHINA – Soybean production in China is forecasted to be 18 million metric tons (MMT) in 2020/2021 while imports are forecast at 95 MMT, according to estimates developed by FAS Beijing and reported by USDA.

The increase in production is as a result of acreage expansion put under production, driven by continued government subsidies and relatively high soybean prices in the first months of 2020.

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The forecast area of production in 20/21 according to the report is 9.46 million hectares (MHa).

Industry sources generally agree that soybean production will be higher in MY20/21 based on a larger planted area.

However, their forecasts ranging from 16.8 MMT to 17.6 MMT continue to be lower than those of Chinese government sources.

China’s National Grain and Oils Information Center (CNGOIC) raised its forecast for MY20/21 soybean acreage to 9.8 MHa with combined planted area for Heilongjiang and Inner Mongolia at 5.87 MHa, a net growth of 0.4 MHa from the previous year.

Based on expanded area and above average yield, CNGOIC also increased its forecast for MY20/21 soybean production to 19 MMT, up from the official Chinese production figure of 18.1 MMT in MY19/20.

The forecast by China’s Ministry of Agriculture and Rural Affairs (MARA) for MY20/21 soybean production is 18.82 MMT, based on a yield gain and increased planted area of 9.6 MHa.

The report by USDA has further indicated that soybean meal feed use in the period under review is forecasted rise to 71.4 MMT compared to the 68.7 MMT of MY19/20.

Feed production is projected to rise as the swine herd continues to recover from ASF and the poultry sector expands to meet growing demand.

Likewise, the forecast of soybean crush for MY20/21 is 93 MMT, higher from MY19/20 soybean crush estimate of 89.5 MMT.

China’s vegetable oil use slumped in early 2020 due to widespread restaurant and cafeteria closures during the coronavirus outbreak.

Some catering establishment were still not fully operational as of mid-August, and new outbreaks since mid-June in Beijing, Liaoning and Xinjiang further delayed the government’s push to return to normal business operations in these regions.

“Assuming no further widespread COVID-19 outbreaks, China’s vegetable oil use is expected to recover in MY20/21 as consumer confidence recovers,” indicates USDA.

Soybean food-use demand in MY2019/2020 is estimated at 13.5 MMT, a 0.6 MMT increase over the previous marketing year based on greater soy food consumption in response to rising pork prices.

Likewise, MY20/21 food-use soybean demand is forecast to increase compared to MY19/20 to 13.6 MMT.

China prohibits the use of soybeans derived from agricultural biotechnology for food products, and most food-use soybeans are produced domestically in Northeast China.

The Chinese government regularly purchases Northeast soybeans in order to bolster farmers’ income, as well as to stock the strategic reserve used to manage supply.

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