China's soybean imports to hit 4-year low as ASF bites

Chinese soybean imports during the 12 months starting in October are expected to fall to their lowest level since 2015 as demand for soymeal is set to fall on the ongoing outbreak of African swine fever, according to a USDA report published Monday.

The USDA expects the total import volume to shrink to 83 million mt in 2019/20, down nearly 1.2% versus the 84 million mt in 2018/19.

That figure is lower than both the 84.9 million mt that the Chinese ministry of agriculture and rural affairs projects and the 86 million mt that the USDA's Washington DC office expects.

Soymeal demand in China is also expected to drop more than 3% in the next marketing year with China forecast to consume 64.78 million mt of soymeal, the USDA said on Monday.

“Lower feed demand and smaller soybean imports in 2018/19 and 2019/20 are results of significant declines in China’s sow and hog inventories due to African swine fever,” the USDA said.

Soymeal demand in feed use is expected to drop more than 3% from 65.7 million mt in the 2018/19 marketing year to 63.58 million mt in 2019/20 marketing year.

The majority of soybeans imported into China are crushed into soymeal which is used in animal feed as a critical source of protein for the massive animal-farming industry in the country.

More than 40% of the country’s soymeal output is used to feed China’s 400 million pigs, but analysts expect the ongoing ASF outbreak could cut that pig herd figure by up to half.

Much of the spare meal production is expected to head to the aquaculture and poultry sectors, where demand for chicken and fish is expected to ramp up.