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China’s import volumes of key food commodities such as soy, maize and wheat have likely peaked as the country seeks to increase domestic output on national security grounds, local analysts told MNI.
Soy imports – used mainly as animal feed – will hit 100 million tonnes by year end but may decline slightly next year given government plans to reduce the pig breeding herd from the current 42.1 million sows to 41 million due to overcapacity, said Darin Frederichs, co-founder of Shanghai-based agriculture research firm Sitonia Consulting.
Soybeans imports have reached about 82.42 million tonnes so far this year, up 14.6% y/y according to recent customs data.
Frederichs told MNI maize imports should stabilise this year and next at around 20 million tonnes a year after jumping from less than 10 million in 2019 when the government finished selling excess reserves. Wheat imports will remain at around 12 million tonnes next year, Frederichs added.
Chinese agricultural commodity imports should stay stable for several years despite China’s drive for self-sufficiency as the low productivity of elderly small-plot farmers and limited land availability constrains attempts to increase output, he said, adding efforts were focused on the use of genetically-modified seed to boost yields.
Looking ahead, Beijing remains on track to boost domestic soy output to 23 million tonnes a year by 2025 from the current 19 million tonnes, according to researchers at Mysteel, a commodity intelligence firm based in Shanghai. The country’s total grain imports should remain stable at about 51 million tonnes of grain next year, they said.
In May, Cong Liang, deputy director at the National Development and Reform Commission, said China wanted to increase domestic grain production by 100 million tonnes using science and technology, while Li Liying, a researcher at China Agricultural Network said in a recent report that although China plans to rely less on imports in future, they will remain important to adjust short-term imbalances.
China Corn & Wheat Imports (millions of tons), Source: Mysteel
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.