Food security concerns prompt China to cut soybean meal from animal feed

The new target aimed at reaching less 13 percent by 2025 is slightly lower than the previous one set at 13.5 percent. Yet, the direction and aim has not changed, said Lief Chiang, a senior analyst at Rabobank.

“The goal is to build a more resilient supply chain amid geopolitical risks,” he said.

China buys more than 60% of the world’s soybeans, well over 90 million tons per year, mainly from the United States and Brazil.

“On the one hand, they would like to decrease the absolute volume of soybean imports, but for now, as a contingency, they want to diversify and further decrease their dependence, especially on the United States,” Chiang added.

The push to reduce the use of soybean meal has been successful so far, helped in large part by rising prices of the protein-rich ingredient in recent years, which has led feed manufacturers to reduce its use.

• Rabobank estimated in January that the proportion could fall to 12 percent by 2030, reducing China’s soybean imports to 84 million tons.
• This year, imports will range among the 95 million tonnes, Chiang said.

The new plan could have a bigger impact. As China could reduce soybean meal consumption by at least 3 million tons a year, said Liu Bing, an analyst at Donghai Futures. Which would be the equivalent of 4 million tons of soybeans.

Imports could fall to 82 million tonnes by 2025, he said. As feed manufacturers turn towards using greater quantities of rapeseed, sunflower seed and synthetic proteins to replace soybean meal.

Lower soybean imports will result in lower soybean production. However, this will lead towards a greater demand for palm oil imports to compensate for such reductions, he added.

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Source: Food security prompts China to cut soybean meal from animal feed