The country has used subsidies to encourage farmers to grow more of the crop, but the results have not been impressive
SASKATOON — China’s attempt to become more self-sufficient in soybeans is fizzling, according to an analyst.
The Ministry of Agriculture and Rural Affairs’ 2021-25 five-year plan set a target of boosting production of the oilseed to 23 million tonnes by 2025, according to Dim Sums, an anonymous blog about China’s agricultural economy.
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That was expected to boost China’s self-sufficiency by six to seven percentage points.
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However, the ministry has forecast 2024 production at 20.45 million tonnes, slightly less than last year’s production and 2.5 million tonnes short of the 2025 target.
That would imply a 17.8 per cent self-sufficiency rate, only slightly better than the 16.6 per cent posted five years ago.
It’s because China is expected to import 94.6 million tonnes of the crop in 2024-25, according to the China National Bureau of Statistics.
Meanwhile, soybean prices in October were 22 per cent below last year and 35 per cent below October 2022.
“China has wasted huge amounts of money and resources achieving a marginal increase in soybean output that has plummeted in actual value,” said Dim Sums.
The government has been providing farm subsidies, disseminating high-yielding varieties, promoting corn-soybean intercropping and providing soybean financing, credit and insurance, all in an attempt to promote increased production.
The subsidies were lucrative, providing an estimated 40 per cent of total revenue for soybean growers in Heilongjiang province in 2024.
MarketsFarm analyst Bruce Burnett is not surprised that China is not making much progress in its goal of becoming more self-sufficient in soybeans.
“It was probably doomed to failure from the beginning,” he said.
“They have been able to do it with other commodities, but to do it with soybeans is going to be like pushing a rope.”
That is because China’s soybeans are mainly grown in the northeast part of the country, where corn is also planted.
Burnett said there are no extra acres available there, which means soybeans would have to push higher-yielding corn out of the rotation. That is improbable unless the subsidies were extremely lucrative.
“It would be very, very hard to incent farmers to produce soybeans over corn,” he said.
“It’s easy to draw these things up on paper, but it’s a lot harder to truly put them into action.”
The upshot is that if China wants a viable hog sector it is going to have to continue importing soybeans from Brazil and the United States, a mutually beneficial form of trade.
However, it is likely that China may become more self-sufficient in soybean production simply due to faltering demand for the product.
Some analysts believe China’s soybean consumption has peaked and is on the way down due to an aging and declining population and maturing diets in that country.
“China does not offer the same growth story today that it did (10) years ago,” Owen Wagner, grains and oilseeds analyst with RaboResearch Food & Agribusiness, said during a recent webinar.
Burnett agrees with that assessment.
“Consumption is going to level off, that’s probably true,” he said.
Contact sean.pratt@producer.com
