China's soybean trade pattern has changed significantly: the US soybean price advantage no longer exists
In midsummer July, PeakPegasus, a bulk carrier carrying US soybeans, became a “net red”: In order to compete with China Customs’ counter-measures of 25% import tariffs, “Fei Mafeng” played a “life and death speed” in China’s Yellow Sea. ". On October 18th, more than three months later, the “Dragon Push 603” grain special barge loaded with thousands of tons of soybeans arrived in Fuyuan Port of Heilongjiang Province from the Russian Far East. This was the first time that Chinese enterprises planted non-GMO soybeans in Russia. The waterway is returned to China in large quantities.
The same is the soybean ship that arrived in China. Why do you have this different fate?
When China and the United States were in the midst of trade, ordinary soybeans became the protagonist of inciting huge economic benefits. This is reflected in the trade friction between the United States, the world's largest soybean producer and exporter, and the world's largest soybean importer, China. It also reflects China's long-term search for diversified soybean import channels. Work hard. If the soybean trade situation continues to develop as such, it will kick off the reshaping of the global soybean trade pattern.
China's demand for soybeans continues to grow
As the country of origin of soybeans, China was once the largest soybean exporter.
According to statistics, before 1994/95, China was a net exporter of soybeans. After entering the year 2000, strong demand has prompted China's soybean imports to soar. In 1999/00, China's imported soybeans just exceeded 10 million tons. In 2009/10, China's soybean imports soared to 50.34 million tons, and even soared to 93.5 million tons in 2017/18.
There is no doubt that China will also be the top spot in the world's soybean importing countries.
In just 25 years, China has completed the transition from a soybean exporter to the world's largest soybean importer, accounting for 60% of global soybean trade.
Lin Guofa, research director of Breckon Rural Credit Group, explained to the First Financial Reporter that the reason behind this is the rapid growth of China's economy, which has boosted the consumption level of residents, the daily protein intake per capita of residents has continued to increase, and the protein structure of residents' nutritional diets. It also changed from the previous plant-derived protein to the animal-derived protein. The increased demand for animal source proteins has stimulated the rapid growth of the aquaculture industry in China.
It is worth noting that the pattern of food imports dominated by soybeans has already formed in China, and the external dependence of soybeans has also hit record highs. According to statistics, in 2017, China's soybean imports accounted for 73.1% of the total food imports in the year, and the foreign dependence reached 86.2%, and most of the imported soybeans were genetically modified soybeans from the Americas.
At present, Brazil, the United States, and Argentina are the three major importing countries of China, and their imports account for about 95% of total soybean imports.
In 2017, China imported 50.93 million tons of soybeans from Brazil and imported 32.85 million tons from the United States. They accounted for 53.3% and 34.4% of China's total imports, respectively. Since Brazil surpassed the United States in 2013 and became China's largest source of soybean imports, Brazil's growing soybean production and price advantage has continued to squeeze the US soybean market in China. Due to soybean export policy and domestic land, meteorology, resources and other factors, Argentina's soybean production fluctuated greatly, exporting 5 million to 10 million tons of soybeans to China every year.
It should be noted that China is the largest export market for US soybeans, and about 62% of the US soybeans are sold to China. Sino-US soybean trade is highly dependent on each other. After the trade friction between the two countries escalates, soybeans will become one of the most affected bilateral trade goods.
Significant changes in the soybean trade pattern
The "Fei Ma Feng", which is accelerating the running of the Chinese market, will be transferred to other markets in the future due to the lack of competitive advantage in the context of China's 25% tariff on US soybeans.
Wang Wenjie, director of the Tianjin Animal Husbandry and Veterinary Research Institute and chief expert of the Tianjin dairy industry technology system, believes that after the tariffs on soybeans imported from the United States, the soybean market price may rise significantly, and it is expected to rise by about 600 yuan per ton. many. This will inevitably affect the breeding industry, causing cost increases and fluctuations in the prices of livestock products. If imported US soybeans rise from 3,200 yuan / ton to 3,838 yuan / ton, which has exceeded the Brazilian soybeans, but also higher than the market price of Northeast soybeans, the price advantage of US soybeans in the Chinese market will no longer exist.
Wang Wenjie said that the way out for China's aquaculture industry is to open source and reduce expenditure.
He explained that open source is the development of new sources of soybeans, new protein feeds, imports of non-US soybeans, and imports of other protein feeds. At the same time, we will increase the cultivation of domestic soybeans in China, expand their planting area, and increase their production. Throttling is the application of new technologies to save or reduce the use of protein feed, including the application of low-protein diet technology to improve feed utilization technology. At the same time, tap new protein feed resources, or replace the resources of protein feed.
The diversification of China's import channels will completely change the global soybean trade pattern in the future. From the perspective of China's soybean imports, in the first eight months of this year, China's soybean imports decreased by 2.1% year-on-year to 62 million tons. Among them, US soybeans accounted for 7.8 million tons, significantly lower than the 11.4 million tons in the same period last year. The number of imported Brazil increased to 50.6 million tons, up from 44.2 million tons in the same period last year.
Lin Guofa expects that China's imports of soybeans from Brazil in the next five years are expected to reach 75 million to 80 million tons per year, much higher than the 5.093 million tons in 2017. The number of soybeans imported from Argentina and Uruguay is also expected to increase.
In addition, China's market to reduce imports of soybeans from the United States is gradually being digested by South America, while also increasing investment in South American soybeans. For example, COFCO acquired the international grain merchants Niedera and Noble Agriculture in the Netherlands, and some companies invested in soybean cultivation in Brazil and other countries in South America.
The trade horizon needs to be expanded to the whole world, and China will also expand the source of soybean imports through multiple channels. For example, imports of soybeans from countries such as Russia, Ukraine, and Africa.
As mentioned at the beginning of the article, to seize the opportunity of returning to the Russian bean, Fuyuan will build a non-GMO soybean distribution processing center for import and export of Russia to Russia in Heilongjiang Province. After the project is completed, it will reach a million tons of soybeans in five years. The output value is 10 billion yuan.
In addition, in early September this year, China and Ethiopia signed a protocol on the phytosanitary requirements for soybeans to China, marking that Ethiopian soybeans can be officially exported to China.
Ethiopia is a big agricultural country in Africa. In recent years, the planting industry has developed rapidly and is a new exporting country of soybeans. Opening up the country's soybean imports, the outside world interprets it as a policy trend that enriches China's soybean import source market.
Not a feed "downgrade" is a technological advancement
In addition to expanding the source of soybean imports and looking for alternatives, China is also actively guiding feed companies to rationally formulate and reduce the amount of protein used in animal feed.
Recently, the China Feed Industry Association has organized some experts and large-scale feed enterprises to draft the "China Feed Industry Association" group standards for "piglet, growing and finishing pig compound feed" and "laying chicken and broiler compound feed". The public comment period ended on October 15.
“In order to promote the scientific and technological progress of the feed industry, reduce the consumption of feed ingredients and reduce the environmental pollution caused by the aquaculture industry,” the two groups proposed to reduce the lower limit of crude protein levels in feed and increase the upper limit.
Cardamom is the main source of feed protein. According to estimates, if the soybean content in Chinese pig feed is reduced to the international level, it is equivalent to a reduction of 27 million tons of soybeans per year, which is about 82% of China's total soybean imports from the United States in 2017.
Despite the sound tone, the breeding industry such as pigs will face “downgrade” of consumption. However, it needs to be seen that the feed of soybean meal by Chinese aquaculture enterprises has been higher than the normal amount of live pigs for a long time. In China, this ratio is 20%, while the international level is 12%.
Lin Guofa told the First Financial Reporter that although high feed protein can increase the daily gain of livestock farming and shorten the number of days of slaughter, too high feed protein is likely to lead to high ammonia concentration in the field, which is not conducive to the health of livestock. In addition, too high crude protein results in low protein conversion in feed and high nitrogen content in excreta, polluting the environment.
At present, pork consumption in China has reached a high level, and consumption of poultry, eggs and poultry is also at a high level, and consumption growth is slowing down. How to improve the quality of livestock products will be a new development direction of the industry. In 2016, the vigorous development of herbivorous cultivation developed by the Ministry of Agriculture and Rural Areas is expected to usher in new development opportunities, and pasture planting is also facing great development. Among them, alfalfa and Qingma corn have great development potential.