China trade: imports of US soybeans rise as Ukraine war, South America drought limit sources
- China has been importing millions more metric tonnes of soybeans in recent months than its past average
- World’s top importer of soybeans is looking to protect and bolster its supply chain as food-security fears mount
US soybean exports to China are leading their five-year average this year, as the war in Ukraine and drought in South America hamper alternative sources, according to an industry body.
American soybean producers shipped 27.3 million metric tonnes to China from September 1 to April 22, said Scott Gerlt, an economist with the American Soybean Association.
Over the past five years, Gerlt said, China ordered 22 million to 23 million metric tonnes in the September-April periods.
Russia’s war in Ukraine has cramped China-bound exports of wheat, corn and sunflower oil from the two farm-rich countries, he said, in turn raising prices of soybeans as a substitute. Four-fifths of US soybeans are processed into livestock feed and the rest into vegetable oil.
China was hoping in 2019 that Russia could step up “soybean cooperation”, Chinese media outlet Yicai Global said at the time, quoting a Ministry of Commerce spokesperson.
US soybean contracts came to slightly more than US$16 a bushel in March and now stand above US$17 per bushel.
South American soybean-exporting nations have been struggling with drought conditions since last year, Gerlt said, reducing shipments to China from normally vibrant sources. Argentina, Brazil and Paraguay are South America’s chief exporters.
“What’s clear is that China will be paying more to import food for people and livestock, whether it’s now or later in the year, and they don’t have a lot of supplier choices,” said Douglas Barry, council communications vice-president of the Washington-based advocacy group US-China Business Council.
“It’s supply and demand, which augurs another good year for farmers in the US heartland, whether it’s due to volume or value,” Barry said.
China is the world’s top importer of soybeans, taking in about 97 million metric tonnes in 2021, according to market research firm Statista. And about 162.8 million metric tonnes of soybeans were imported globally.
Marine shipping, land transit and workplace closures in China due to Covid-19 over the past two months have not hampered US soybean exports, Gerlt said.
“We’re not going to beat last year’s record, but we’re going to be up there,” Gerlt said.
Heilongjiang accounts for about 40 per cent of China’s total soybean output.
“They’re a fairly large producer of beans, but it’s not nearly enough,” Gerlt said.