China total oilseed production in 2014-15 estimated at 55.8 million tons, down 5% from an estimated 58.7 million tons in MY13-14. Reductions in the planting areas and yield for peanuts and cotton lowered total oilseed production.
China soybean production is likely down 1.6% to 12 million tons in 2014-15 compared to 12.2 million tonnes last year, according to USDA attaché report. Acreage under soybean has declined to 6.75 million hectares from 6.85 million a year ago.
In its October report, the China National Grain and Oils Information Center (CNGOIC) maintained its soybean production estimate at 11.5 million tonnes.
Currently, soybean harvest has almost ended in major soybean-producing regions in the Northeast Provinces. The marketing (farm-gate) price ranges from RMB 4,000 to 4,200/metric tonnes.
Soybean yield is reportedly higher than the previous estimate. The soybean quality is rated as good due to adequate sunshine and moisture during the growing period. However, industry leaders in the Northeast Provinces note that even with the new target price, soybean profits continues to be lower than rice and corn.
China’s soybean imports for MY13-14 at 70 million tons, up from the 69 million tons in the previous report, and forecasts MY14-15 imports to reach a record 73 million tons. The MY13-14 imports are 10 million tons higher than MY12-13.
The rapid import growth in MY13-14 reflects a continuing growth in the use of protein meal. In addition, good crushing margins in the first months of 2014, and excess crushing capacity led to more soybean imports in the second half of 2014.
China’s soybean crushing capacity continues to expand and is estimated to reach more than 140 million tons per year by the end of 2014. Utilization rate stands at less than 50 percent.
The government’s sale of soybean reserves ended at the end of September to support the marketing of MY14-15 new crop, and prevent downward pressure on prices as the new crop supplies enter the market. CNGOIC reported through the government sold 2.48 million tons of soybean reserve from May to September 2014. Out of the total sold, approximately 1 million tons are from the 2010 crop, and 1.49 million tons are from the 2011 crop. These soybeans are mainly for food use.
Given an excessive supply of soybean meal in the domestic market, China increased soybean meal exports in MY13-14. These exports are expected to reach 2.2 million tons, up 66 percent from the previous year. This trend is likely to continue in MY14-15. The current low-priced imported soybeans will likely stimulate China’s crushing sector to increase utilization of its large crushing capacity and to meet the protein meal demands of neighboring markets.