Experts suggest China's soybeans should stick to the non-GMO differentiated path
Shao Haipeng
[China's soybean output is unstable, market prices are unstable, making supply unstable, and it is very difficult for overseas markets to develop a sense of reliance]
China's international soybean trade began in 1995, when the country changed from a net exporter to a net importer, and import volumes have increased year by year. China's soybean imports usually account for nearly two-thirds of total global soybean trade.
Data from the General Administration of Customs show that in 2014 total soybean imports were 71.4 million tons, up 12.7% year on year. As of October this year, China had imported a cumulative total of 65.18 million tons of soybeans, up 14.7% year on year.
Because the vast majority of soybeans grown in the United States, Brazil and Argentina, the countries that supply soybeans to China, are genetically modified varieties, this also means that the quantity of GM soybeans China imports has been increasing all along.
Imported GM soybean varieties have undergone strict review and approval by the Ministry of Agriculture and have obtained safety certificates for the import of GM agricultural products. Once these soybeans enter the country, they are mainly used for oil pressing and processing; after refining, soybean oil enters the food sector, while soybean meal, as the main processed product, is used for animal feed.
A saying has long been widely circulated in China that imported foreign GM soybeans have dealt a blow to domestic non-GMO soybean production and the market.
A few days ago, Zhang Xiaoping, chief China representative of the American Soybean Association, said in an exclusive interview with China Business News that if Chinese soybeans are to compete with imported GM soybeans, they need to maintain their non-GMO characteristics. “It is precisely because everyone else is planting GM soybeans that the preciousness of non-GMO soybeans is shown, and the value of planting non-GMO soybeans is shown.”
The differentiated path of non-GMO
China Business News: Do you agree with the saying that imported soybeans have dealt a blow to the domestic soybean market?
Zhang Xiaoping: This saying has existed for a long time. It was only after 2000, when China's soybean imports exceeded 10 million tons, that it became even more strident. China's imported soybeans mainly come from three sources: the United States, Brazil and Argentina. In earlier years, the United States held a slightly larger share, but now Brazil has already become China's largest source of imported soybeans.
The impact of soybean imports on the domestic industry is limited to the production stage, and this is obvious. This topic was extensively discussed within the industry around the time China joined the WTO, and people have been exploring how domestic soybeans can respond to the impact of imported soybeans. Now, more than ten years after WTO accession, China's soybean industry still exists, and the so-called “destruction” has not occurred. This shows that domestic soybeans are the crop among China's important agricultural products that has integrated with the international market earliest and most closely, and are also the best able to withstand the impact of the international market.
Personally, I believe that without competition there can be no progress. If China's soybean industry is said to have been depressed by so-called impact, then the main reason is that the soybean industry as a whole has not yet fully recognized China's position in the world soybean market, and revitalizing the soybean industry is even less possible to discuss.
Non-GMO is a prominent characteristic of Chinese soybeans. China is the hometown of soybeans and has the richest wild soybean germplasm resources, making it a treasure trove for global soybean variety improvement. Precisely because of this, this pure land needs to be protected. More importantly, we should explore how to truly and meaningfully revitalize China's soybean industry.
China's non-GMO soybean output is currently not very large, and prices should be substantially higher than imported GM soybeans. But the reason we feel the impact of imported soybeans is that we always compare high-quality non-GMO soybeans with imported GM soybeans for oil use. Why not seize the high ground of the high-end soybean market, instead of insisting on competing with imported soybeans in a relatively low-end product market?
According to differentiated market demand, we can produce different high-quality soybeans and soybean products, and realize the market value of China's non-GMO soybeans themselves. This market is not only the domestic market, but also the international market; not only the soybean food market, but also the animal feed and edible oil markets.
China Business News: In 2014, China's soybean output was only 12.2 million tons. Has all of it entered the high-end market?
Zhang Xiaoping: The vast majority has not. In 1993, China's demand for food soybeans was about 5 million tons, and now it is close to 11 million tons. That is to say, domestically produced soybeans can now only meet domestic food demand. If demand continues to increase and domestic production capacity cannot keep up accordingly, it is possible that China's food soybeans will also need to be imported from abroad in the future. It is obvious that over the past two or three years, a considerable amount of imported GM soybeans has flowed into the food soybean market every year. This quantity is estimated at no less than 3 million tons and as much as 5 million tons, close to one-third of total domestic soybean output.
How big is the international non-GMO market
China Business News: Has the international non-GMO market opened up?
Zhang Xiaoping: Of course. Internationally, there are two major consumer markets led by the European Union and Japan, where consumers particularly favor non-GMO soybean products. The market has long existed and still shows a trend of continuous expansion. Japan imports about 2 million tons of non-GMO soybeans from the United States at high prices each year to meet its domestic consumer demand for natto, soybean paste, tofu and so on.
China's soybean output is unstable, and market prices are unstable, which often makes supply unstable. In this way, it is very difficult for overseas markets to develop a sense of reliance, and this is also a problem that China's soybean industry needs to solve.
China Business News: No matter how you put it, in your view, there is still a difference between GM soybeans and non-GMO soybeans?
Zhang Xiaoping: It is not about emphasizing the difference between non-GMO and GM, but rather that if someone needs it, we must satisfy them. The difference between non-GMO and GM soybeans is a matter for scientists to handle and for government regulatory authorities to handle. It is just that since this market exists, we should serve it well, do good market promotion, and meet differentiated demand.
Why can't the price of China's non-GMO soybeans rise now? The main reasons are that quality is not recognized, supply is unstable, and after-sales service is inadequate. We should do a great deal of market promotion work, and in this way we can form a virtuous interaction. It is just that there is now a lack of such organizations to formulate long-term plans for industry development, to coordinate the entire industrial chain toward the common goals in the plan, and to implement the development plan in stages and steps, in a down-to-earth manner. Therefore, fundamentally speaking, it is still the soybean industrial chain that has problems.
As for the highly market-oriented United States, everything is market-oriented. The development of new products and new production methods is determined according to market demand. Of course, the market itself also needs to be continuously developed. The U.S. soybean industry places great importance on developing markets, on creating demand, protecting and expanding demand, and at the same time also pays attention to serving demand. American soybean farmers focus on global food security, food safety and sustainable development, relying on modern technologies, such as seed technology and precision agriculture technology, to improve production methods, increase crop yields and reduce production costs. All of these have certain reference value for China's soybean industry.