Chinese soybean production forecast to hit record high
Chinese government incentives for oilseed production, particularly soybeans, along with the high prices for major oilseeds, and growing conditions in major soybean producing regions in China are resulting in hikes in area and yield.
A US Department of Agriculture (USDA) FAS report forecasts that China’s soybean imports for 2022/23 will be 96.5 MMT on higher demand for soybean meal (SBM) for swine and poultry farming and vegetable oil demand by the country’s food sector. But the import growth is forecast to be partially constrained by the higher domestic soybean production, and ongoing sales of state reserve soybeans, noted the authors.
The country’s MY 2021/22 soybean imports were 91.6 MMT, down by 8.1 MMT on the previous year, on weak demand for SBM and vegetable oil.
Soybean meal demand
The USDA FAS team expects SBM consumption in China to reach 72.8 MMT in MY 2022/23, up 3.6% from the previous year.
Soybean oil use is also expected to increase on expected demand recovery due to lower soybean oil prices and limited supply of sunflower oil, they said.
These factors are expected to drive soybean crushing higher in MY 22/23 while crushing of other oilseeds is expected to remain generally stable.
Rapeseed prospects
Estimates for rapeseed production in China for MY 2022/23 is unchanged at 15.4 MMT, up from an estimated 14.45 MMT in MY 2021/22.
“Rapeseed area has expanded moderately in the Yangtze River region, including Sichuan, Hubei, and Hunan, driven by local demand for rapeseed oil and rising rapeseed prices.”
Weak economic growth, zero-Covid policy
The team cautioned that overall consumption growth in China continues to be hampered by weak economic growth, and partly due to ongoing uncertainty regarding the Chinese government’s zero-Covid policy, with there being no indication of any such policy revision in the near term.
“Accordingly, significant uncertainty remains in forecasting China’s demand for soybeans and other oilseed products.”
