China to boost 2023 soybean output after record harvest

China is aiming to further increase its domestic soybean production in 2023 after its record harvest in 2022 as the government continues to look for ways to cut reliance on imports.

The world’s largest soybean importing country plans to expand the total planting area for soybeans by more than 10 million mu (667,000 hectares) in 2023, according to Tang Renjian, the Minister of Agriculture and Rural Affairs.

If realized, the plan will push China’s soybean planting area to a new record high of nearly 11 million hectares, up 6% year on year.

Assuming a stable yield of 1.98 tons per hectare, China’s domestic soybean output could grow by 1.3 million tons this year to a new high of 21.6 million tons.

China’s soybean imports in the 2022 calendar year are expected to fall to the lowest level since 2020 to around 90 million tons. China’s customs is due to release the data for December 2022 later this week.

Despite a rising domestic output, it remains a small portion of China’s overall soybean supply each year with imports accounting for 70-80%.

Unless there is a sharp improvement in crop yield or a significant drop in demand, China’s demand for soybean imports is likely to stay high despite a larger domestic output.

Chinese farmers have also been reluctant to plant soybean instead of corn due to lower profitability. The Chinese government has been offering a larger subsidy to incentivize farmers.

To further boost increase domestic planting, the government is projected to raise the level of support to farmers in order to achieve the target of a bigger planting in 2023.