China's soybean crushing industry lost 20 billion yuan in 2014

In 2014, prices in China's soybean crushing industry fluctuated downward, with the entire industry profitable only in November and posting losses in all other months.

Since 1996, almost all of the increase in global soybean imports has come from China. In 2014, China's soybean imports reached 71.4 million tons, accounting for 65% of global soybean imports.

In 2014, as domestic soybean oil and soybean meal prices fluctuated downward, China's soybean crushing industry lost 20 billion yuan.

At the same time, the state cancelled the temporary soybean purchase and storage policy in 2015 as well as the 2 million tons of national soybean reserves from 2014. China's soybean imports in 2015 are expected to reach 74 million tons, an increase of only 2.6 million tons over 2014. The cost of imported soybeans is far lower than the cost of domestic soybeans, so for domestic soybeans to become profitable, supply and demand must reach a balance, that is, what farmers sell and what consumers buy must be in balance. A global soybean surplus directly caused international soybean prices to fluctuate downward in 2015.

In 2014, China's vegetable oil imports fell sharply, and China's vegetable oil surplus inventory continued to increase.

Since two-thirds of China's vegetable oil depends on imports, and given the inversion between domestic and international vegetable oil prices, reduced financing-related imports and huge domestic inventories, vegetable oil imports may continue to decline in 2015.

In 2015, domestic soybean imports and crushing volumes will continue to increase, and domestic vegetable oil supply will remain ample. Coupled with ample international vegetable oil supply and difficulty in raising prices, a large increase in domestic vegetable oil prices is unlikely.

Palm oil is the variety with the largest increase in global vegetable oil output. Against the backdrop of ample global vegetable oil supply and strong pressure against price increases, Director Zhang predicted that the downside room for palm oil futures prices in 2015 may be greater than that for soybean oil.