China soy imports to hit 100m, US faces "fierce" competition: USDA

Chinese imports of soybean will reach 100 million mt in the upcoming 2018/19 marketing year as rising incomes, urbanisation and modernization of the feed and livestock sectors continue to drive demand for protein, the USDA said in a release on Wednesday.

The figures will not come as a surprise to the market as the Chinese government itself estimated in January that demand would rise 5% on the 98.42 million mt it imported in 2016/17.

However, the figures come as reports emerge China is examining the impact on taxing US soybeans.

"The United States soybean exports to China are expected to face fierce competition from South American countries in 2017/18 and beyond," the report said, acknowledging production from Brazil, which is estimated this year to produce more than 114 million mt for the second consecutive year.

That compares with expected US production of 119 million mt.

China’s domestic policy is to encourage farmers to produce more soybeans, although its domestic production is expected to stay stable at around 58 million mt through this marketing year and next, according to the USDA.

That is due to "limited arable land and stagnant yields."