Soybean importers are fighting back.
China, the world's biggest importer of the oilseed, may be
poised for flat imports of the oilseed, ending a run of growth stretching back
more than a decade.
Oil World on Thursday forecast the country's imports holding
steady at 93m tonnes in 2017-18, starting in November, sapped by large carry-in
inventories, after the buying spree of recent months, and by a rise in domestic
The influential analysis group pegged Chinese production in
2017-18 rising by roughly 4m tonnes to 16m-17m tonnes, fuelled by farmers'
shift away from corn, as encouraged by a Beijing subsidy shake-up after a
guaranteed pricing scheme saw the creation of huge state inventories of the
(For the record, the US Department of Agriculture, whose
data set market benchmarks, this week lifted its forecast for China's 2017-18
imports by 1.0m tonnes to 95.0m tonnes, on a harvest figure of 14.0m tonnes,
although this upgrade did run counter to analysis by its Beijing bureau.)
'Major step forward'
The European Union is taking steps to curtail its needs too.
Soybean harvest forecasts for top EU growing countries, 2017, change on year, and (on five-year average)
Italy: 1.08m tonnes, +0.2%, (+23.2%)
France: 400,000 tonnes, +11.5%, (+79.3%)
Romania: 350,000 tonnes, +32.7%, (+69.6%)
Croatia: 210,000 tonnes, -10.1%, (+46.7%)
Source: European Commission
The EU is the second-biggest importer of the oilseed, but is
also signally the top buyer of soymeal, the high protein feed ingredient made,
with soyoil, from crushing soybeans.
Rapeseed, the main oilseed grown by EU farmers themselves,
has a relatively low meal content, being more generous in vegetable oil than
This week, in France, Avril, the oilseed processing-to-meat
group, and producers' co-operative Euralis launched a tie-up for a soybean
crushing plant which they claimed represented a "major step forward in the
development of a 100% French-grown soy network".
The plant will process a modest 25,000-tonnes of
French-grown soybeans a year – a modest amount compared with the EU's overall
However, it is a signal of the bloc's mounting interest in
growing its own soybean output, rather than relying so heavily on imports of
beans and meal.
Indeed, EU soybean production has, after flat-lining since
the 1990s at 1.0m-1.5m tonnes, shown a marked increase over the past three
According to the European Commission, EU soybean output this
year will reach 2.59m tonnes, a modest increase year on year but 44% ahead of
the five-year average.
Italy will remain the bloc's top producer, with a harvest of
1.08m tonnes, a rise of 0.2% year on year, although 23% above the five-year
A faster growth trends are being seen in the likes of Romania,
with output pegged at 350,000 tonnes, up 33% year on year, and France, where production
will rise 11.5% t0 400,000 tonnes.
The increasing focus on domestic production is being
encouraged by, besides the ready demand for soybeans, the development of seed
varieties, stemming from research in the likes of Ukraine, which has better
enabled a crop native to the tropics to grow in more temperate climes.
UK group Soya UK, for instance, says that "the varieties
available now are light-years ahead of the varieties available 15 years ago.
"They offer earlier harvests, excellent yields and produce
Yield prospects have also been helped by improved seen
treatments and coatings, which have improved germination rates.
Soybeans vs rapeseed
However, there are extra financial incentives too.
In the UK, in particular, results from the default oilseed,
rapeseed, have been depressed by the surge in populations of cabbage stem flea
beetle enabled by the EU ban on neonicotinoid insecticides.
Soybeans, as a legume rather than a brassica, offer a
different pest risk – besides fixing nitrogen in the soil, so being a less expensive
crop to grow.
Furthermore, the European Commission's revised the Common
Agricultural Policy subsidy rules, in incentivising farmers to grow a range of
crops, have encouraged adoption of soybeans too.
USDA officials earlier this year, forecasting that harvested
area of soybeans "will increase in all EU member states except Croatia",
attributed the crop's growing popularity in the main to the Common Agricultural
Policy's "ecological focus areas and coupled payments".