Reuters – China’s agriculture ministry has issued a three-year action plan to reduce soymeal use in animal feed as it tries to reduce its heavy reliance on soybean imports.
The new plan proposes soymeal ratios in animal feed should be reduced to less than 13 per cent by 2025, from 14.5 per cent in 2022.
Authorities in the world’s top soybean importer already issued guidelines in 2021 to its animal feed industry recommending lower soymeal ratios.
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The new plan would “guide the feed industry to reduce the amount of soybean meal, promote the saving and consumption reduction of feed grains, and contribute to ensuring the stable and safe supply of grain and important agricultural products,” said the document, published by the Ministry of Agriculture and Rural Affairs.
Some say the plan could have a big impact. China could reduce soymeal consumption by at least three million tonnes a year, said Liu Bing, an analyst at Donghai Futures.
Imports could drop to 82 million tonnes by 2025, he said, with feed makers using more rapeseed, sunflower seed and synthetic protein as soymeal substitutes.
However, lower soybean imports would result in less soyoil production, requiring more palm oil imports as compensation, Liu added.
Jim Sutter, chief executive at the U.S. Soybean Export Council, said he was not worried about a significant drop in imports.
“I think we’ll see strong demand continuing. There’s a limit as to how much soy can be taken out of rations,” Sutter said during a visit to Beijing.
The new target of under 13 per cent by 2025 is slightly lower than an earlier target of 13.5 per cent, but the direction is not new, said Lief Chiang, senior analyst at Rabobank.
“The whole point is to build a more resilient supply chain amid geopolitical risks,” he said.
China buys more than 60 per cent of the world’s traded soybeans, well over 90 million tonnes a year, largely from the United States and Brazil.
“On the one side, they would like to lower the absolute volume of soybean imports, but meanwhile as a contingency, they want to diversify and lower their dependency more, particularly on the United States,” added Chiang.
The push for lower soymeal use has so far been successful, helped in large part by soaring prices of the protein-rich ingredient in recent years, which has pushed feed makers to scale back its use.
Rabobank estimated in January that the ratio could drop to 12 per cent by 2030, lowering China’s soybean imports to 84 million tonnes.
