China is a major soybean consumer in the world, with the consumption increasing steadily. In 2017, the soybean consumption in the country exceeded 0.11 billion tons, ranking first in the world. Meanwhile, 83% of the domestic soybeans consumed were used for crushing, 14% for food, and only 2% for feed.
The consumption structure of soybeans has shown a concentrated trend in the past five years. Crushing is more dominant with a slight increase in the share of consumption, which is currently about 83%. The share of consumption for food remains stable, fluctuating around 14%. The consumer demand for feed and seed still occupies a marginal status and the share of consumption for seed has declined slightly.
Related report: Research Report on China Soybean Industry, 2018-2022
The demand for the domestic soybean market mainly depends on imports. For example, in 2017, the production volume of soybeans in China was only 15.3 million tons, while the import volume reached 96 million tons, accounting for 86% of the total. At present, the imported soybeans in China are single-sourced, mainly from Brazil and the U.S. In 2017, Brazilian soybeans accounted for 53% of the total soybean imports, and the U.S. soybeans took up 34%.
According to China National Grain and Oils Information Center, the consumption of soybean crush is projected to reach 93 million tons during 2017-2018, including 2.5 million tons of homegrown soybeans and 90.5 million tons of imported ones. Domestic soybeans only made up 2.7% of the crushing consumption, well below their proportion of 13.5% of the total consumption. The main reason is that the oil yield of domestic soybeans generally ranges from 16% to 17%, while that of imported transgenic soybeans ranges from 19% to 20%, approximately 3% higher than the former. The difference in oil yield directly affects the profit of soybean crushing. In the same period, profits of imported soybean crushing surpass those of the domestic one. In 2017, the average crushing profits of imports of crushers in Shandong and Dalian were respectively 556.8 CNY/ton and 498.1 CNY/ton higher than those of domestic soybeans. It shows that the crushing process of domestic soybeans has long been in losses.
Supply-demand Balance of Soybean in China (10 thousand tons)
|
Year |
2012 |
2013 |
2014 |
2015 |
2016 |
2017 |
|
Beginning Inventory |
849 |
529 |
871 |
1,183 |
1,192 |
701 |
|
Production Volume |
1,181 |
1,275 |
1,385 |
1,051 |
1,185 |
1,530 |
|
Import Volume |
5,984 |
7,035 |
7,835 |
8,322 |
9,350 |
9,600 |
|
Aggregate Supply |
8,014 |
8,839 |
10,091 |
10,556 |
11,727 |
11,831 |
|
Export Volume |
26 |
15 |
16 |
18 |
10 |
22 |
|
Aggregate Consumption |
7,485 |
7,968 |
8,908 |
9,364 |
11,026 |
11,218 |
|
Ending Inventory |
529 |
871 |
1,183 |
1,192 |
701 |
613 |
|
Inventory to Sales Ratio |
7.07 |
10.93 |
13.28 |
12.73 |
6.36 |
5.46 |
In 2017, the production volume of global soybeans reached 340.86 million tons, decreasing by 2.98% YOY. The main soybean producers were the U.S., Argentina and Brazil, with the aggregate production volume of 82%.
USDA’s Forecast on Production Volume of Soybeans in the World
|
Country |
2014/2015 |
2015/2016 |
2016/2017 |
2017/2018(March) |
|
The U.S. |
91.39 |
106.86 |
116.92 |
119.52 |
|
Brazil |
86.7 |
96.5 |
114.1 |
113 |
|
Argentina |
53.4 |
56.8 |
57.8 |
47 |
|
China |
11.95 |
11.79 |
12.9 |
14.2 |
|
Globe |
282.61 |
313.77 |
351.32 |
340.86 |
The YOY growth rate of soybean consumption in the globe, China and the U.S. in 2017 was 4.25%, 7.78% and 2.88%, respectively. In China, soybean consumption continues to increase more rapidly than that of the global and the U.S. As the production volume is far less than the consumption, China’s soybean consumption mainly relies on imports. At the same time, the soybean consumption in the U.S. is rising slowly. In 2017, the production volume reached 119.52 million tons in this country, but its consumption was only 57.11 million tons. As a consequence, more than 50% of the supply needed to be consumed through export, which has an important impact on the U.S. soybean market.