Recent announcements from China on increasing its soybean productions in 2022 provoked new discussions on whether the country can achieve that goal given the existing tight balance of food supply and demand.
“The long-term insufficient supply for use in [animal] feed and [vegetable] oil has become part of China’s biggest food security weakness”, the state-run newspaper Economic Daily noted on Thursday.
China faces a structural challenge when trying to boost its soybean and oilseeds – it creates land competition with rations and corn. Hence, similar attempts in the past have not been proven possible.
Moreover, farmers have faced relatively lower yields and economic returns when growing oilseeds compared with corn, and this has affected their enthusiasm for growth the crops, the paper noted.
It would be necessary for the government to develop support prices, subsidies, and insurance policies to help ensure farmers’ incomes. However, all of these measures are already in place.
China faced a similar situation in 2018 when it tried to increase its soybean output during the US-China trade spat which barred US soybean exports to China.
During that period, Chinese provincial governments dramatically raised subsidies to encourage soybean production. But the output only grew marginally and cut into corn production in the country.
China’s peak soybean production in the past decade was in 2020/2021 marketing year during which 9.9 million hectares yield 19.6 million tons (a yield of 198 tons per hectare). Even if China matched the yield of 3.44 tons per hectare in the US, its soybean production could only reach 34 million tons.
While this could help reduce China’s dependency on soybean imports, it has a limited impact on a country that is forecasted to import more than 100 million tons in the current marketing year.
The paper also urged that China could consider expanding productions of other oilseeds including rapeseed, sunflower seed, and peanut to alleviate its dependence on soybean imports.
However, crop yield of other oilseeds tends to be lower than soybeans and the meal output is also lower which generates less benefit for feed use.