China confirms its plan is to reduce dependence on US soybeans

China will continue to diversify its soybean import sources after China’s first reported purchase of U.S. soybeans in 2024 came about seven months late. The move is aimed at ensuring a stable supply as the country still relies on soybean imports alongside its growing domestic production, experts noted.

The comments came after the U.S. Department of Agriculture announced on Wednesday that private exporters reported sales of 132,000 metric tons of soybeans for delivery to China during the 2024-25 marketing year.

The deal is reportedly China’s first purchase of U.S. soybeans for the upcoming season, coming well after the usual time China begins booking cargoes of U.S. soybeans, Bloomberg reported on Thursday. The report said China began buying U.S. supplies in December 2022 for the 2023-24 year, beating this year’s schedule by about seven months.

China’s soybean imports in 2024 are likely to remain stable or increase marginally, with major sources concentrated in the Americas including Brazil and the US, Li Guoxiang, a researcher at the Institute of Rural Development of the Chinese Academy of Social Sciences, told the Global Times on Thursday.

Li noted that Brazil remains the largest soybean exporter to China, due to the strong competitiveness of local soybeans and the stable trade relationship with China, resulting in relatively low risk for Chinese importers.

Li said China still needs to import soybeans from the US, while the timeline for Chinese importers to place orders has been influenced by volatile US policies and Chinese importers’ risk management efforts.

The request made by Chinese importers was a choice to maximize business interests based on market demand, Gao Lingyun, an expert with the Chinese Academy of Social Sciences, told the Global Times on Thursday.

In the first five months of 2024, Brazil, the US, Canada, Russia and Argentina remained the top five soybean exporters to China in terms of value. China imported $12.56 billion worth of soybeans from Brazil, followed by the US with $6.25 billion and Canada with $531 million, according to data from the General Administration of Customs (GAC).

Other countries including Benin, Ukraine, Uruguay, Ethiopia and Tanzania also remain among the top soybean suppliers to China, according to GAC data.

Experts stressed the importance of China continuing to diversify its soybean suppliers, as the country still relies on the international market.

Diversifying sources will minimize import risks for China, which currently relies on a few large suppliers, as supplies can be disrupted by various factors such as weather, trade restrictions and uncertainties resulting from changes in local industrial and supply chains, Li said.

Li expected the main trading partners for soybeans to continue to be in the Americas, while there is potential to explore more in Africa and Europe.

In addition to promoting sustainable soybean imports, China has also been stepping up efforts to boost domestic production. According to the Ministry of Agriculture and Rural Affairs, China will continue to expand the soybean planting area to over 150 million mu (10 million hectares) this year. The government will support the northeast region in developing the entire industrial chain of soybean processing and soybean-related agricultural products.

With information from News Agencies