BEIJING (Reuters) – New standards on the protein content of animal feed in China will cut its annual consumption of soybeans by 14 million tonnes, the government said late last week, marking a drop of about 13 percent from the last crop year in the world’s top buyer of the oilseed.
The nation has been pursuing multiple ways to reduce its consumption of feed ingredient soymeal, made from soybeans, amid a festering trade war with the United States, its No.2 supplier of beans.
China, which typically buys about two thirds of globally traded soybeans to help feed its huge livestock herd, has been taking steps such as turning to alternative meals and reducing protein levels in feed.
China’s Feed Industry Association on Friday approved new standards for feed for pigs and chickens, lowering the protein levels in pig feed by 1.5 percentage points and those for chickens by one percentage point, the agriculture ministry said in a statement that day. It did not say when the new standards would take effect.
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The ministry also said in the statement that China’s overall yearly consumption of soymeal would fall by 11 million tonnes. The country used 71 million tonnes of soymeal to make animal feed in the 2017-18 crop year.
“This will have a very important impact on industry, but it’s still not clear how long it will take to be fully introduced,” said Yang Linqin, an analyst at Cofco Futures.
The National Development & Reform Commission (NDRC) – the state economic planner – in July discussed ways to switch up pigs’ diets with major feedmakers including New Hope Group, Dabeinong, CP Group and Hefeng Group.
While the new standards are only guidelines, the major feedmakers have already agreed to follow them, Yang said.
The agriculture ministry said China depended on imports for nearly 80 percent of its protein raw materials, and that this had caused a “bottleneck” to development of the country’s feed and livestock sectors.
Lowering protein levels in feed would also reduce the negative impact on the environment, it said.
China consumed 71 million tonnes of soymeal in the 2017/2018 crop year, according to official think tank the China National Grain and Oils Information Center.
It is expected to import 83.7 million tonnes of soybeans in 2018/19, according to agriculture ministry forecasts, down from 93.9 million tonnes the year before.
TURNING TO BRAZIL
China is entering what is typically its top buying season for U.S. soybeans. However, only a handful of U.S. cargoes have arrived in the country in recent months and it is expected to largely rely on beans from top supplier Brazil.
Its soybean imports are set to drop by a quarter in the last three months of 2018, their biggest fall in at least 12 years as buyers curb purchases.
Beijing imposed 25 percent tariffs on $34 billion worth of U.S. products including soybeans on July 6, in retaliation for U.S. tariffs on Chinese goods of the same amount.
China also scrapped a tax rebate on soymeal exports last week, and has recently dropped a ban on imports of Indian rapemeal, an alternative protein source.
Soymeal futures on the Dalian Commodity Exchange for January delivery fell 0.5 percent on Monday to 3,365 yuan ($483.95) per tonne.
($1 = 6.9532 renminbi)
Source: Investing.com
