Research Report on China Soybean Industry, 2018-2022
|発行||China Research and Intelligence||商品コード||371933|
|出版日||ページ情報||英文 60 Pages
|中国の大豆産業の分析 Research Report on China Soybean Industry, 2018-2022|
|出版日: 2018年04月18日||ページ情報: 英文 60 Pages||
The soybean industry includes the departments and segments of national economy related to soybean production, trade, processing, logistics, R&D and relevant services. The soybean industry chain is the longest one of major agricultural commodities in China, involving planting, processing, supply of edible oil, forage, breeding, etc. With the development of China's economy and the improving living standards, the consumption volume of edible oil per capita is also rising, which was less than 3kg in 1980 but already more than 20kg in 2017. A large part of the edible oil in China is transgenic soybean oil because of its low price and high production volume.
China was a leading producer of soybeans. In the early 1990s, the highest export volume exceeded 1 million tons in China as a net exporter of soybeans. However, soybean has become a kind of agricultural products with the largest import volume in China. Since 1996, the domestic production volume of soybeans has been on the decline. From 1995 to 2002, the import volume of soybeans constantly increased while the export volume declined year by year. The import volume of soybeans in China reached 13.94 million tons in 2002, which was close to the domestic production volume of soybeans. In 2003, the imported soybeans amounted to 20.74 million tons, first exceeding the domestic production volume. The import volume was already over 90 million tons in 2017.
As the soybean supply in China depends on imports, the spot price of domestic soybeans is closely related to the cost of imports. The import cost of soybeans from the U.S. and South America is directly linked to the spot price of domestic soybeans in the same year. In addition, the import cost is of little difference between South American soybeans and American ones, while the costs are even highly related to each other.
From 2004, the domestic soybean processing enterprises experienced the overall losses while international grain businesses entered China and took the chance to occupy over half of the market shares, which was followed by the transfer from trade businesses to processing enterprises. The domestic enterprises purchase soybeans at high cost in 2004 while the soybean price declined sharply from then on, leading to the closing down of numerous import enterprises in China.
In the processing of soybeans, major evaluation indexes include the degree of self-support and prices of soybeans in China. The self-support degree of the domestic soybeans is lower than 20% and is likely to continue to decline. The price of soybeans fluctuated sharply, particularly influenced by imported soybeans.
Currently, in terms of soybean processing, foreign capital dominates in the Chinese capital structure of the oil crusher industry. There are two targets for foreign capital in the domestic soybean processing industry. One is to sell larger number of soybeans to China, and another is to occupy more market shares by beating the competition in China.
In order to earn more profits, many foreign-funded grain and oil enterprises are aimed to establish a complete industrial chain from agricultural means of production, production of agricultural products to agricultural processing and goods circulation.
It is estimated that as the demand for soybeans in the Chinese market continues to increase, and there is no growth potential for the production volume of the domestic soybeans, the import volume will keep growing in the next few years.
Importance of Importing American Soybeans from the View of CRI
Over the past ten years, the rising level of urbanization has been triggered by the economic development in China. (By the end of 2017, the domestic urbanization rate reached 58.5%.) In China, agriculture is dominated by small-scale production with extremely low profits. Therefore, many rural population floods into cities and towns for a job rather than working in the farms resulting in a declining labor population of rural areas. China also becomes more and more dependent on imported food. In order to meet the demands for grain and feed processing and the food industry, it needs to import a considerable number of soybeans, rice, wheats, corns, etc. As an important grain crop and oil-bearing crop, soybean is irreplaceable with various uses. Due to the high cost and low oil yield, the cost performance of home-grown soybeans is far below that of imported ones. For one thing, the higher planting cost of the domestic soybean leads to its price exceeding that of the imported ones. For another, the oil yield of the domestic soybeans usually ranges from 16% to 17%, while that of the imported transgenic ones generally ranges from 19% to 20%, 3-4% higher than the former. The difference in oil yield directly affects the profit of soybean crushing. The profit margin of using imported soybeans as raw materials for oil extraction is higher than that of using domestic ones. Bean pulp, a by-product after oil extraction of soybean, is an important vegetable protein feed.
According to CRI, the annual production volume of soybeans is estimated to be lower than 13 million tons in China in recent years. However, as the economy develops and the living standards increase in China, the annual demand for soybeans keeps rising, exceeding 100 million tons in 2017. Obviously, the homegrown soybeans cannot satisfy the domestic market demand, so China has to import numerous soybeans every year. In 2017, the import volume of soybeans in China totaled 95.535 million tons, increasing by 13.85% YOY. The import value reached USD 39.62 billion, increasing by 16.63% YOY. At present, China has a single source of imported soybeans, mainly comprising Brazil and the U.S. In 2017, Brazil was the largest source of imported soybeans to China, the import volume from which reached 50.928 million tons. The U.S. ranked second, and China imported 32.854 million tons of soybeans from the country in 2017, with the import value amounting to USD 13.933 billion. Both the import volume and import value accounted for more than 1/3 of those of the domestic soybeans.
Based on the analysis of CRI, if China reduces the imported soybeans from the U.S. and increases imports from other countries, there will be two problems: (1) increasing prices of the suppliers from other countries; (2) and lack of reliable alternative sources in China. As the largest source of imported soybeans to China, Brazil has produced approximately 100 to 110 million tons of soybeans a year in recent years. Because of more than 200 million population and the advanced animal husbandry, the country itself also needs to consume a number of soybeans. In 2017, the export volume of soybeans in Brazil reached about 57 million tons, almost 90% of which was exported to China. Supposing that the import volume of soybeans from the U.S. to China decreases by a half YOY in 2018, totaling about 16.4 million tons, the imports from Brazil can only fill up the gap of 6 million tons, while the rest 10.4 million tons will be a big loss that is difficult to compensate for. There is an opinion that Russia can be an alternative importer, but China only imported 0.51 million tons of soybeans from the country in 2017, accounting for about 0.5% of the total import volume. The production volume of soybeans in Russia even totaled no more than 4 million tons in 2017. Unlike the industrial goods, agricultural products are hard to rapidly increase the production capacity, because the production volume is greatly influenced by natural conditions. Besides, it is also impossible for the suggestion that the domestic migrant workers return to the rural areas for soybean planting or go to the Russian Far East to open up wasteland for soybeans.
CRI report also suggests that tax on the imported soybeans from the U.S. will lead to the increase in prices of both imported soybeans and domestic ones. Admittedly, the rising prices will influence the downstream of the industry, such as processing industries of soybean oils, bean products and feeds. As a consequence, ordinary consumers will have to face the higher prices of edible oil and food. In addition, the CPI and even the inflation level will also rise to a certain extent. However, as for the low-income people, their living standards will decline. Soybean belongs to a basic agricultural product instead of luxury goods. For the Chinese enterprises and consumers, soybean oil is an important source of edible oil and bean products are also the significant food. On top of this, the pig raising, poultry raising and aquaculture industries are inseparable from the high-quality feed of bean pulp. With the support of imported soybeans, the production volumes of pork, poultry meat and eggs and aquatic products in China can all rank top in the world. If there is a shortage of soybeans in the Chinese market and the rapid increase in soybean prices, only a few of soybean importers and distributors can earn huge profits. In fact, it will be harmful to the interests of most people.
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