A trade war "wake-up call" has prompted strong support for soybean production from Chinese officials in 2019, according to one article posted on Chinese feed industry web sites. The Chinese government has recently circulated a document calling for increased soybean production and higher subsidies for soybean farmers.
A second article circulating last week included a scan of a Ministry of Agriculture and Rural Affairs (MARA) "letter of opinion" launching a "soybean revitalization plan" and reported on a meeting of Heilongjiang Province communist party officials discussing the importance of boosting soybean production to give China greater power in trade negotiations. The document is being passed around in the soybean industry but is not public.
The MARA document reportedly sets goals of increasing area planted in soybeans to 150 million mu (10 million hectares) in 2022. That would represent a 19-percent increase over four years from 126 million mu (8.4 million hectares) planted in 2018. The document calls for a 10-million-mu increase in 2019. Calculations using the 1880-kg/ha average yield in 2018 suggest this expansion of acreage would increase China's soybean output by 3 million metric tons over four years.
The document and the two articles discussing it emphasize the importance of increasing the financial returns to farmers from growing soybeans versus corn. Local officials in northeastern provinces will be urged to set this year's soybean and corn subsidies to make soybeans at least as profitable as corn in order to "fully mobilize" farmers to plant soybeans. Officials are ordered to publicize soybean subsidy information around the Lunar New Year holiday ahead of the spring planting season.
In 2018, the soybean subsidy in Heilongjiang Province--the largest soybean-producing region in China--was already boosted to 320 yuan per mu and the corn subsidy was slashed to 25 yuan per mu.
One of the writers noted that "soybean revitalization" documents have been issued each year with little actual impact. The second writer reported that soybean farmers and traders say 2018-harvested Chinese soybeans have not sold well and prices dropped from 1.85 yuan/500g to 1.7 yuan/500g. "If the sales problem can't be solved, farmers won't take the risk of growing soybeans," the writer warned.
The first writer attributed the government's strong support for soybean production this year to a wake-up from the trade war that drew attention to China's reliance on soybean imports. Although China consumes mainly imported soybeans--the writer says--domestic soybeans cannot be discarded and must continue to be grown even if they lose money.
The second writer also described the MARA "soybean revitalization" letter partly as a strategy to deal with the trade war. He surmised that the series of soybean revival documents have been issued annually to give China a "right to speak" in the soybean market by reducing excessive reliance on imports. He says China's strategies are to diversify suppliers of imported soybeans and to reduce protein inclusion in animal feed. He mentions Argentina, Canada, Russia, Ukraine, and Bolivia as alternative suppliers. He does not mention that China's imports from each of these countries actually fell during 2018, and China does not import any soybeans from Bolivia. (Maybe he meant Uruguay.)
A second article circulating last week included a scan of a Ministry of Agriculture and Rural Affairs (MARA) "letter of opinion" launching a "soybean revitalization plan" and reported on a meeting of Heilongjiang Province communist party officials discussing the importance of boosting soybean production to give China greater power in trade negotiations. The document is being passed around in the soybean industry but is not public.
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January 15 letter of opinion from MARA crop management office
calling for soybean revitalization program in northeastern provinces in 2019.
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The document and the two articles discussing it emphasize the importance of increasing the financial returns to farmers from growing soybeans versus corn. Local officials in northeastern provinces will be urged to set this year's soybean and corn subsidies to make soybeans at least as profitable as corn in order to "fully mobilize" farmers to plant soybeans. Officials are ordered to publicize soybean subsidy information around the Lunar New Year holiday ahead of the spring planting season.
In 2018, the soybean subsidy in Heilongjiang Province--the largest soybean-producing region in China--was already boosted to 320 yuan per mu and the corn subsidy was slashed to 25 yuan per mu.
One of the writers noted that "soybean revitalization" documents have been issued each year with little actual impact. The second writer reported that soybean farmers and traders say 2018-harvested Chinese soybeans have not sold well and prices dropped from 1.85 yuan/500g to 1.7 yuan/500g. "If the sales problem can't be solved, farmers won't take the risk of growing soybeans," the writer warned.
The first writer attributed the government's strong support for soybean production this year to a wake-up from the trade war that drew attention to China's reliance on soybean imports. Although China consumes mainly imported soybeans--the writer says--domestic soybeans cannot be discarded and must continue to be grown even if they lose money.
The second writer also described the MARA "soybean revitalization" letter partly as a strategy to deal with the trade war. He surmised that the series of soybean revival documents have been issued annually to give China a "right to speak" in the soybean market by reducing excessive reliance on imports. He says China's strategies are to diversify suppliers of imported soybeans and to reduce protein inclusion in animal feed. He mentions Argentina, Canada, Russia, Ukraine, and Bolivia as alternative suppliers. He does not mention that China's imports from each of these countries actually fell during 2018, and China does not import any soybeans from Bolivia. (Maybe he meant Uruguay.)
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