China's soybean imports to show only small rise in 2021-22

China’s soybean imports will increase next season – but not by much, US officials said, foreseeing a “slowing pace” of the country’s hog herd rebuild constraining growth in need for feed meals.

The US Department of Agriculture’s Beijing bureau - in its first forecasts for 2021-22, starting in October – pegged at 1.0m tonnes expansion in China’s soybean imports, taking them to 100.0m tonnes.

That would represent a fresh record high, on the bureau’s estimates, “reflecting a steady recovery in feed demand from the livestock and poultry sectors”.

However, the forecast is below estimates from some other commentators, with Rabobank pegging China’s soybean imports at “potentially” 108m tonnes next season, and AgResource foreseeing a 110m-tonne figure.

China’s soybean trade is one of the most important dynamics in global oilseeds, given that the country is responsible for some 60% of world soybean imports.

‘Slowing pace of restocking’

The bureau said its forecasts factored in marked slowdown in expansion of China’s meal demand in 2021-22 - to 1.3m tonnes, from growth of 4.4m tonnes expected in the current season.

The estimate was based on expectations of “a slowing pace of the gradual swine restocking” in China from the African swine fever epidemic which peaked in 2018,

“Protein meal feed use will also be constrained by lower sow productivity and increased occurrence of animal diseases in breeding sows and piglets.”

The bureau highlighted expectations of a drop in pig producers’ profits from the “current, relatively high level of about 2,300 renminbi ($30) per head”, with margins squeezed by higher input costs.

“Likewise, an excessive build-up in poultry production capacity has already resulted in losses for broiler farmers, dampening meal demand by the poultry sector, which is likely to be stable or even decline in 2021.”

‘Driving force’

For rapeseed, the bureau forecast China’s 2021-22 imports 3.0m tonnes, up 100,000 tonnes year on year but “lower than the recent historical average of about 4.5m tonnes due to China’s trade tensions with Canada, its main rapeseed supplier”.

Imports of palm oil, meanwhile, will nudge 50,000 tonnes higher next season to 6.60m tonnes.

“Steady GDP and population growth, rapid urbanisation, and increasing rural consumption have pushed up demand for vegetable oil over the last decade,” the bureau said, highlighting that the foodservice industry will be a “driving force” for further expansion, fuelled by the bakery segment.

“Bakery revenue continued double digital growth in 2020 and exceeded 260bn renminbi, up 12% from 2019.

“Industry sources believe that this will be a sustained trend over the next several years while consumer demand reaches its potential.”

However, palm oil import needs next season will be constrained by the extra volumes of soyoil thrown off by an increased soybean crush.