China: Soybean and Corn Strip Compound Planting Expands to 20 Million Acres
Talk to our team about AgFlow's offering →
Reading time: 2 minutes
At present, China’s annual Soybean output is about 20 million tons. The Soybean sowing area in China is expected to be 10.42 million hectares in 2023, an increase of 177,000 hectares year-on-year. Among them, Heilongjiang’s Soybean area is 5 million hectares, an increase of 68,000 hectares year-on-year. Henan, Sichuan, and Anhui provinces also see slight increases. The national Soybean yield in 2023 is expected to be 2 tons/hectare, a year-on-year increase of 1.8%; the total output is expected to be 21 million tons, a year-on-year increase of 3.5%, setting another record high.
Heilongjiang Province is currently the largest major Soybean-producing area. The Soybean planting area accounts for more than 40% of the country all year round, and the commodity rate exceeds 80%. In 2023, Heilongjiang continues implementing a differentiated subsidy policy for Corn and Soybeans. The original subsidy for Soybean producers will reach more than 350 yuan per mu. The agricultural socialization service project focuses on planting Soybeans and fully supports Soybean production.
Domestic non-GMO Soybeans have a relatively high protein content and are mainly used in food processing to meet edible needs. Soybeans imported from the United States, Brazil, and other countries have a relatively high oil yield and are mainly used to produce edible oil and Soybean meal for feed. Domestic Soybeans and imported Soybeans have different main uses and require differentiated competition. It is expected that in the future, a large volume of Soybeans will be imported from abroad.
As of June, Chinese Soybean imports in 2022/2023 hit 74.62 million tons, an increase of 5.78 million tons year-on-year. The decrease in early imports was mainly due to the high price of U.S. Soybeans. After the launch of South American Soybeans, the price of new Brazilian Soybeans was low, China’s demand improved, and imported Soybeans increased.
In addition, changes in customs policies from March to April delayed arrival at the port. In May, China imported 12.02 million tons of Soybeans, an increase of 2.346 million tons year-on-year, setting a record for a single month. In June, it imported 10.27 million tons. It is estimated that the total Soybean imports in 2022/2023 will exceed 98 million tons, an increase of 6.39 million tons year-on-year.
According to AgFlow data, China imported 52 million tons of Soybean from Brazil in Jan – Aug 2023, followed by the US (11.6 million tons), Argentina (0.94 million tons), Uruguay (0.27 million tons), Singapore (0.15 million tons) and Russia (69,100 tons). Total imports hit 69.3 million tons in Jan-Aug 2023.
National Soybean production will remain high in the domestic Soybean market, and the mismatch between supply and demand may continue to pressure prices. The market expects the opening price to be around the planting cost. The subsequent trend will depend on the state’s reserves and consumption. It is worth noting that the high cost of imported Soybeans may bring opportunities for domestic Soybean crushing.
Judging from the current situation, more imported Soybeans are still arriving in Hong Kong, and the overall domestic supply is expected to be higher. China needs to pay attention to the periodic supply and demand changes caused by customs clearance and the pace of entering the factory. Vegetable oil supply is sufficient, and the oil and fat market is expected to continue to fluctuate and adjust and look for new driving factors.
What impact will such a large-scale import of Soybeans have on daily consumption? According to experts, at present, imported Soybeans are mainly used for oil extraction and feed, and the Soybean meal after oil extraction is used as raw material for feed production; domestic Soybeans are primarily used for food, such as Soybean products, Soybean milk, and tofu.
According to the estimates of the Market Early Warning Expert Committee of the Ministry of Agriculture and Rural Affairs, China’s annual Soybean consumption in recent years was about 110 million tons, of which more than 85% are used for crushing and consumption to meet the needs of feed and oil. The consumption of Soybean products and protein powder is less than 15 million tons, about 14 million tons. Domestic Soybeans can fully meet the consumption needs of urban and rural residents.
“One County, One Policy” Solution for Increasing Soybean Yields
Last year, China began to demonstrate and promote Soybean and Corn strip compound planting on a large scale, covering an area of more than 15 million acres. The average Corn yield per mu of band-shaped composite planting is 538 kilograms, and the average yield of Soybeans is 124 kilograms per mu.
This year, the Ministry of Agriculture and Rural Affairs will further expand the scope of Soybean and Corn strip compound planting technology demonstrations to 17 provinces (autonomous regions and municipalities directly under the Central Government). Since the beginning of the year, relevant localities have successively introduced policies and measures to increase support and mobilize farmers’ enthusiasm for growing beans.
Sichuan province has strengthened the guarantee of seeds and other agricultural materials, extensively conducted online and offline critical technical training, and increased the strip compound planting area by 1.85 million acres. Shanxi province allocated 164 million yuan in subsidy funds in advance and arranged 820,000 acres of strip compound planting in 74 counties.
This year, driven by the subsidy policy, increased to 20 million acres. In the future, strip compound planting will continue to expand its implementation scale steadily. The Ministry of Agriculture and Rural Affairs proposed that this year, a comprehensive “one county, one policy” solution for increasing Soybean yields will be formed for 906 Soybean-producing counties, focusing on the implementation of Soybean yield improvement actions in 100 key counties and integrating the promotion of high-yielding and high-oil varieties.
Price Game
Argentina offered the highest CFR price, USD 616 on average. The following countries were the US (USD 610), Brazil (USD 559), and Ukraine (USD 553).
Regarding CFR price trends, Argentina and Brazil have been showing almost the same from the beginning of 2023. Indeed, Brazil benefits from its price strategy.
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time
