Increased demand for soya beans meal in China continues to have a positive impact on global soya beans trade, with global soya beans consumption forecast to grow 4 percent, driven mainly by China’s strong protein feed demand – pork, aquaculture, and dairy products.
This demand is projected to lift soya beans imports to a record 93 million tons.
These facts were contained in the World Markets and Trade report for the month of June, released by the United States Department of Agriculture (Foreign Agricultural Service).
China’s soya bean imports (October to April) stand at 49.6 million tons, 4.2 million more than during the same period last year.
Imports so far this year from the United States total 33.4 million tons, over 6.8 million more than last marketing year.
USDA projects that in 2017/18 China’s demand for soya beans will continue to grow, creating more opportunities for U.S. producers and exporters
Despite recent variability in animal production, expanding hog populations, consolidation and modernization of the animal production sectors (primarily higher yields per hog and dairy cattle), as well as a growing aquaculture industry, are all driving total feed demand and production upward.
China remains the top global producer of pork and currently holds over half of the world’s supply, so without a doubt, rising pork production is the main driver of feed demand.
However, China’s fish farming is also leading the world’s aquaculture growth and accounts for approximately 60 percent of globally farmed warm water species.
With limited global supplies of high-priced fish meal, China’s fish industry was forced to turn to alternatives.
Feed expense is the main cost in fish farming and can account for almost half of total input costs.
Fish meal, with its high protein content, has been a traditional ingredient but transitioning to less expensive soybean meal has become a necessity. This is generating more demand for imported soybeans.
Another changing industry in China is dairy, which alongside aquaculture is transitioning from backyard farming to more intensive commercial production.
Urbanization, rising incomes, and the new two-child policy have contributed to growth in dairy consumption and growing consolidation and modernization of the industry.
As Chinese dairy farmers have been struggling with low milk prices, and many smaller producers are exiting the industry, further consolidation into larger and more efficient operations continues.
Global oilseed production is forecast higher this month at 573.0 million tons. A larger cottonseed forecast in Pakistan and China, as well as higher sunflower seed output projected for Ukraine, more than offset reductions in EU rapeseed.
Global soybean production is unchanged this month. Soybean imports are lower this month as ample carry-in stocks in Brazil reduce the need for imports from Paraguay.
Global exports are reduced on lowered projections for Argentina. Global soybean stocks are lifted this month with increases in Argentina and Brazil. The U.S. season-average farm price for soybeans is unchanged at $9.30 per bushel.
U.S. export bids in May, FOB Gulf, averaged $367/ton, up $7 from last month. FOB Brazil Paranagua averaged $367/ton, up $10 from last month. FOB Argentina Up River averaged $360, up $9 from last month. Early season weather concerns impacting the pace of plantings in the United States helped support prices.
For 2017/18, Argentina soybean exports are cut 500,000 tons to 8.5 million reflecting the lower 2016/17 forecast and strong competition with Brazil and U.S. origins in 2017/18; European Union sunflower seed oil and meal imports are both raised 100,000 tons to 1.6 and 3.8 million, respectively, following reductions in rapeseed crop projections.
Ukraine sunflower seed oil and meal exports are boosted 200,000 tons each to 5.2 and 4.6 million, respectively, following greater crop prospects.