China Launches Campaign to Boost Domestic Soy Production

Ongoing trade dispute between China and the United States further pushed the Chinese government to exert more efforts to increase its domestic soybean output this year.

Problems on soybean imports urged authorities in the northeastern Heilongjiang and Jilin provinces to discuss steps to boost soybean production by planting, according to reports posted on city government websites.

The provincial government of Heilongjiang published a document which calls for an extra five million mu or 333,333 hectares of land to be planted with soybeans this year.

This ‘emergency campaign’ also called for 2 million mu additional land to be included in an ongoing program to rotate corn with other crops such as soybeans. A publication reported that farmers will get 150 yuan ($23.60) per mu or 0.16 acres as compensation for planting soybeans.

Authorities posted a notice on the official website of Heile, Heilongjiang referring to provincial and national meetings to boost planting of the commodity.

China is the world’s top buyer and consumer of soy products, most are used to feed livestock. According to official data, cited by reports, China imported 95.54 million tons of soybeans last year. On April 4, Beijing announced that it would impose a 25 percent tariff on soybean imports from the US, which is a reprisal over trade tariffs imposed by Washington on Chinese goods.

Context

The US Department of Agriculture’s (USDA) data showed that China canceled a net 62,690 metric tons of US soybean purchases two weeks after the country announced the soybean tariffs.

However, China continued to buy soybeans from the US even after the cancellation of purchase stated above. The data from USDA also showed that the US shipped 256,000 tons of soybeans to China in the week ending on April 26.

US soybeans became cheaper and more competitive on the market since China increased its purchase of Brazilian soybeans. Chinese state-run media anticipated that the soybean tariffs would make a huge impact on the agricultural economy of the US and affect the trade of soybeans in the global market.

Nevertheless, on April 6, two days after China announced the tariffs, 458,000 tons of US soybeans were traded elsewhere than China, according to the USDA.

The USDA did not disclose further information, but analysts believe that countries in the European Union (EU) ordered the soybeans.

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