This year, China's soybean imports will reach 6 times the total domestic soybean production

After all, 2018 has only just passed its first third, so at this point we can only make estimates for this year's soybean imports. It just so happens that the May supply and demand report released by the US Department of Agriculture on Thursday (May 11) included a forecast of 103 million tonnes for China's 2018/19 soybean imports. This is believed to be a fairly authoritative forecast. It should be pointed out that this is not the first time the United States has made such a forecast; in April last year it likewise made a forecast of 97 million tonnes for 2017 soybean imports. However, China's actual imports last year were 95.53 million tonnes, so the forecast was slightly off.

Overall, the US estimate of China's soybean imports is still fairly accurate. Based on this US figure, China's soybean import growth in 2018 will be only just over 5 million tonnes, whereas China's import growth in 2017 was 11 million tonnes. In other words, the US forecast is still fairly conservative, since looking at China's recent soybean imports, the annual increase has been above 6 million tonnes every year.

Looking at the current external environment, China-US relations have also affected China's soybean imports this year. For well-known reasons, China plans to impose additional tariffs on US agricultural products this year, causing US soybean exports to plummet, and according to the latest import information, the volume of soybeans the United States exports to China has fallen by 19%, an extremely large drop.

Regardless of whether the US figures can predict the actual outcome, one situation China has to face is that it is extremely short of soybeans and has developed a severe dependence on imported soybeans. Looking at China's soybean situation in 2017, domestic production was just over 13 million tonnes, while imports were 95.53 million tonnes, forming a sharp contrast, with import dependence as high as more than 80%. It can be said that this has already endangered China's soybean food security.

We have a clear understanding of this. Especially this year, in the face of the impact of China-US relations, it has prompted the State Council to urge Northeast China and the whole country to increase soybean planting area, and many counties and cities have even been assigned quotas for increasing soybean planting area. According to the latest forecast by the Ministry of Agriculture and Rural Affairs today, soybean area this year is expected to increase by 8.1%, and output to increase by 12.4%, reaching 14.45 million tonnes.

Finally, the domestic soybean situation this year may really be about to reverse. At present, with farmers actively responding to the call and government policies substantially raising subsidies, there is already confirmed news that this year's domestic soybean planting subsidy will be no less than 200 yuan per mu, and this year's soybean prices have also gradually emerged from the trough, with planting returns getting higher and higher. Perhaps spring for domestic soybeans is not far away.

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