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Chinese Companies Adopt Measures to Meet Soybean Need
 

Chinese companies have adopted a myriad of measures to effectively meet production needs, despite China importing far less soybeans from the United States since the two countries started imposing tit-for-tat tariffs on each other.

Soybean processing companies have sufficient soybeans as raw materials for production through early 2019, and many have planned to import more miscellaneous meals as alternatives to soybeans, which can effectively reduce soybean imports and meet the needs for production materials, people familiar with the matter said.

Experts estimate that by the end of September, the country's imported soybean stocks will be 3 million tons more compared to the same period last year, and domestic soybean processing companies will have sufficient raw materials even by January 2019.

That is because due to the increase in domestic soybean meal prices and processing profits from March to April, Chinese companies have already imported large amounts of soybeans from South America.

Official statistics showed that from May to August, more than 36 million tons of soybeans have been shipped to Chinese ports from South America, while domestic soybean meal demand is more than 400,000 tons short from expectations per month since May, influenced by the decline in pig prices.

In addition, a large amount of South American soybeans that Chinese companies have already purchased are yet to be shipped, which should happen in September and October, and are expected to arrive at Chinese ports in November.

Besides, there are quite a lot of alternatives for Chinese companies, apart from soybeans.

Although soybean meal, as a by-product of soybean crushing, is the main protein feed for livestock and poultry in China, other livestock and poultry protein feeds, such as rapeseed meal, sunflower seed meal, peanut meal, cottonseed meal and palm kernel meal, also have high feeding value, according to Wang Changmei, director of the market information department of Chinafeed.com.cn, a constancy of Chinese feed market.

The crude protein content of peanut meal is even higher than that of soybean meal. The cottonseed meal’s content of crude proteins is close to soybean meal, and the crude protein content of rapeseed meal and sunflower seed meal is about 80 percent of that in soybean meal, Wang said, adding as feed formulation continues to improve, the technology used to replace soybean meal for feed ingredients with other meals is becoming close to perfect.

Zhao Changjiang, head of the Oil Raw Material Purchasing Department of COFCO Corp, China’s biggest foodstuff conglomerate by revenue, said the company plans to increase the sourcing of alternatives from the international market to make up the possible soybean gap of about 4 million tons for proteins from the end of 2018 to early 2019 in China, if the trade dispute between China and the U.S. continues.

The company has made inquiries on prices of the vegetable, cottonseed and sunflower seed meals in India, Canada, Ukraine and other countries, Zhao said.

The price of seasonal rapeseed meal in Canada is about 2,300 yuan ($335) per ton, which is 150 yuan ($21.85) lower per ton than the contract price of the Zhengzhou Commodity Exchange for January 2019, and provides an option for domestic feed processing companies to increase procurement other than soybeans, according to Liu Yueshu, Deputy General Manager of the Operation Department of ZhongkenGuobang (Tianjin) Co, a leading soybean processing company in China.

(Chinadaily.com.cn August 19, 2018)
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