Farmers in Heilongjiang are reluctant to sell soybeans after prices for domestic non-GMO soybeans have eased due to a large crop this year.
China’s central government is planning to increase soybean production to 23 million tons by 2025 with the planted area aiming to reached 10.7 million hectares.
Demand for non-GMO soybeans this year has been relatively light. Although harvest is fully completed in the main producing province of Heilongjiang, sales remain relatively light.
Farmers are therefore reluctant to sell because their costs of production went up this year, and they are expecting to get relatively higher prices. Some farmers have noted that their land costs had risen by 3000 yuan per hectare compared to last year, while inputs such as seeds and fertilizers had risen by 4000 yuan per hectare.
Some of this increase has been offset by larger government subsidies. Heilongjiang announced a fund of 1 billion yuan to promote the increase in soybean planting area, providing subsidies of 3,720 yuan per hectare for soybean production, but only 2,250 yuan per hectare for corn.
Prices have been under pressure in the second half of this year due to larger production. However, from the start of 2020 through mid-2022, prices were steadily trending higher, and most farmers had expectations that this would continue.
China’s government want to see soybean production continue to rise in the coming years, but it may be difficult to motivate farmers who are seeing lower prices due to higher production. The central government has already promised 40 billion yuan in subsidies for agriculture for 2023, but it remains to be seen if this will motivate farmers to keep planting soybeans.