BEIJING, (Reuters) — Chinese soybean farmers may earn less this year if prices of the oilseed keep falling, said an agriculture ministry official recently and that may threaten the nation’s efforts to promote soy production instead of corn.
Chinese soybean prices started at a low level this year and have dropped rapidly since harvest be-gan in September, pressured by higher domestic output and large volumes of imports, said Tang Ke, director of the market and economic information department at the agriculture ministry.
“If prices keep falling, growing soybeans might be less profitable than last year despite higher subsidies to growers,” Tang said.
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Beijing has issued a series of measures since last year, including higher subsidies for soybeans, to encourage farmers to switch from corn to other crops, to get consumers and processors to use up nearly 200 million tonnes of old-stock corn.
Prices of soybeans in Harbin, capital of China’s top soybean producer Heilongjiang province, fell almost three percent to US$598.40 a tonne from late September, when the harvest hit the market, according to data from official think tank China National Grain and Oils Information Centre.
Soybean output across all of China is expected to reach 14.4 million tonnes this year, up near 11 percent from last year, according to CNGOIC estimates.
At the same time, soybean im-ports remain high. China imported 71.45 million tonnes of the oilseed in the first nine months of this year, up 15.5 percent from a year ago, according to customs data.
“Corn and soybeans are competitors. Farmers will look at the overall profits when deciding what to grow. Corn prices are high and growing corn is more profitable now,” said Zhang Dalong, analyst with COFCO Futures.
Corn acreage is expected to re-cover by 400,000 to 533,000 hectares next year, boosted by higher profits, according to estimates by COFCO Futures.
