China’s Soymeal Consumption & Imports and Efforts To Cut Down Its Heavy Reliance on Animal Feed: A Tridge Analysis

The Chinese government has announced it is working assiduously to reduce its usage of soymeal in its animal feed. The news came from the country’s Ministry of Agriculture and Rural Affairs after a meeting on 9th September, promising to systematically decrease the use of soybean meal in animal feed in a bid to safeguard national security. It further went on to say the reliance on soy imports is a paradox of their food security goals.

China undoubtedly is the world's biggest soybean importer, driven mostly by the demand for meals for animals. In 2019 alone, Chinese domestic consumption of soymeal, according to data from the USDA, was 110.32 million mt, which increased to 112.73 million mt in 2020, but weakened the following year to 106.72 million mt. In 2021 alone, China spent over $50 billion on soybean imports.

The average production volume from 2019 to 2021 in China was 18 million mt, making it impossible to satisfy domestic demand without imports. To this end, in 2019, China imported 98.53 million mt of soybeans with that number rising to 99 million mt in 2020. Domestic consumption fell in 2021, and imports also fell to 90 million mt that year, with Brazil and the United States being the largest suppliers.

The 5% and 10% YoY fall in consumption and imports respectively last year may have arisen from the impact of the pandemic. Better still, the reduction may have arisen from the decision to reduce its consumption owing to the uncertainty that has bedevilled the grain supply lately. Recently though, the Chinese government has purposefully put in place the soybean meal reduction and substitution plan aiming to reducing the quantity demanded (consumed) while also increasing the supply of other feed grains.

For that purpose, the agriculture ministry has proposed the use of other grains such as bran, corn, rice, sorghum, barley, and cassava as appropriate alternatives to soybean. The use of other oilseed meals such as flaxseed meal, sunflower meal and sesame has been suggested. The argument to reduce the use of soy, the ministry adds, has the extra benefit of saving costs for farmers and for feed producers to save on materials.

While the call to reduce reliance on soybeans and soymeal may be in the right direction, whether that is achievable or could be achieved within the shortest possible time remains to be seen. Already, Tridge analysts on the ground report difficulties of some pig farmers getting access to other feed meals such as peanut meal, rapeseed meal, sesame meal and sunflower meal. For the ones that become available, higher prices, often, drive out pig farmer margins causing them to be resorting to soymeal-normally discounted to alternative feed meal.

It is an “easier said than done project” to reduce soybean meal to ensure food security. The Chinese government should thus work harder to support farmers to have access to alternative feed meals and support supply chains as it's incredibly difficult for them to adjust to the new way of doing things.