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China will import less and less soya in the coming years. This is according to Rabobank in a research report. China is by far the largest importer of soya in the world and is the final destination of more than 60% of the world’s soya trade. The product is mainly used in animal feed.
Increasing local production
Although the demand for animal feed will continue to grow in the coming years, this will not be the case for the intake of soya. Rabobank believes that animal feed production in China will grow slightly every year as a result of growth in Chinese livestock farming. However, imports of soya will decrease as a result of increasing local production of animal feed raw materials and the use of less soya bean meal in animal feed, explains grain and oilseeds analyst, Lief Chiang of Rabobank.
China wants to lower the cost of food
China wants to become less dependent on imports of animal feed raw materials. This applies in particular to imports of soya beans. With less supply of soya, the country sees opportunities to lower the cost price of food.
Some animal feed producers have already shown that they can make a good ration for livestock with less soya bean meal. In 2021, China reduced the share of soya bean meal in animal feed to 15,3%. This has reduced the import requirement for soya beans by 14 million tons in four years.
More demand for other protein sources
Reducing the proportion of soya bean meal results in a growing need for amino acids and other protein sources such as insects, enzymes and micro-organisms. In the long term, these new proteins will make a positive contribution to saving natural resources and reducing carbon emissions, Rabobank concludes in the research report. However, according to the bank, the timeline is difficult to estimate, because many developments are still in the development phase.
Significant supply chain implications
China’s decision to become less dependent on imported soya has far-reaching consequences for the supply chain, Rabobank concludes. China will remain the largest importer, but due to the smaller sales to that country, other buyers will have to be found. They will mainly be sought in other areas with emerging economies in the Middle East, Southeast Asia and South Asia.
In addition, more soya bean meal is becoming available in the United States (US) and Brazil due to a growing demand for biofuels. To this end, soya beans are processed in the US and Brazil, which will increase the supply of soya bean meal on the world market. – All About Feed