Soy Demand in China Expected to Reach New Heights
- General News
The U.S. soy industry anticipates that Chinese soy imports will reach record highs in the 2013-2014 market year, which spans from September 2013 through August 2014. This demand is the result of a drop in domestic output and a greater demand for animal feed and edible oil. Four months of heavy rain and flooding in Heilongjiang Province in Northeast China, the nation's largest soybean producing region, will sharply reduce that area’s crop, causing production to drop as much as 500,000 to 650,000 tons this year. China’s National Grain and Oils Information Center forecast that China's soybean output would fall by as much as 2.6 percent to 12 million tons from a year ago, marking the third consecutive year of declining output.
The United States Department of Agriculture (USDA) has forecasted China's soybean imports to hit 69 million tons in the 2013-14 market year, a 16 percent increase over the previous year. China imported 17.7 million tons of soybeans from the U.S. in September, an increase of about 18 percent over the same period last year. USSEC Country Director – China Zhang Xiaoping stated, “This is a positive sign for China to import more U.S. soybeans at the beginning of the 2013-14 market year. From a short-term perspective, Chinese companies will keep a close eye on the U.S. market until April and May of next year, before the South American market starts its soybean selling season.” Mr. Zhang went on to explain that South America's weather conditions and infrastructure, especially Brazil and Argentina's efforts to improve their road and port facilities, will play a key role in determining the size of their soybean exports to China. To further meet domestic demand, Chinese agricultural leaders signed thirteen contracts at USSEC’s U.S. Soy Global Trade Exchange event in September agreeing to purchase $2.8 billion of U.S. soy.