2017/18 China Soybean Supply and Demand Update
16.07.2018 16:00 "Agro Perspectiva" (Kyiv) —
According to the report of the USDA Oilseeds: World Markets and Trade (July 2018), rebounding pork supplies and low meat prices on the Chinese market, coupled with higher global soybean prices and eroding Chinese crush margins, significantly slowed soybean processing between October 2017 and June 2018. As a result, USDA has cut China’s soybean crush forecast by 3.0 million tons, to 92.0 million. With the soybean import forecast unchanged at 97.0 million tons, ending stocks are projected to grow to a new record. In 2017/18, China is projected to consume almost 90.0 million tons of oilseed meals (on a soybean meal equivalent basis), 4.6 percent more compared to last year. This is below last month’s forecast of 6.9 percent
However, China is not only the world’s largest livestock and protein feed producer but also a major player in the vegetable oil market. Supported by strong economic growth over the last decade, the demand for edible oils has also been robust. Continuing urbanization and rising incomes have significantly altered the vegetable oil market as consumers’ preference has been shifting towards premium oils. Soybean oil accounts for nearly half of the total edible vegetable oil consumption, while palm oil is estimated to drop to only 8 percent in 2017/18. However, with lower soybean crush, soybean oil output is forecast to fall and will need to be offset with larger vegetable oil imports, including palm oil.