Russia soybean ban won’t disturb Chinese market

Russia’s recent ban on soybean exports to China amid the COVID-19 outbreak will not disturb the market in China, which has ample reserves and expects more shipments from major suppliers like Brazil, industry analysts said on Thursday.

The agricultural minister of Russia’s Amur Region Oleg Turkov recently said soybean exports to China will be suspended until June. The decision is not only at the level of the Russian Federation, but also at the level of all CIS countries, according to a report from local media ampravda.ru.

All Amur soybeans must be processed either by local enterprises or used in the domestic market, the minister said.

“The Russian decision came after the pandemic threw the global grain market into chaos. To guarantee domestic supplies and stabilize prices, Russia chose to adopt the ban, which is a temporary measure,” said Jiao Shanwei, editor-in-chief of grain website cngrain.com.

“The ban will have limited impact on China’s soybean market because Russia is not a major source of soybeans for China and its shipments to China are small,” said Zhang Liwei, chief analyst for soybeans with the China National Grain and Oils Information Center (CNGOIC), which is under China’s Food and Strategic Reserves Administration.

Russia’s annual soybean output is about 4 million tons and its exports are about 800,000 to 900,000 tons, most of which comes to China, Zhang told the Global Times on Thursday.

Supply and demand of soybeans in China will be basically balanced this year, Zhang said, noting that according to the latest forecast by the CNGOIC, China will import 87 million tons of soybeans from October 2019 to September 2020, and annual new supply will reach 105.1 million tons, while domestic consumption will be about 104.8 million tons.

Brazil is China’s largest foreign source of soybeans. In 2019, China imported 57.67 million tons of soybeans from Brazil, accounting for 65 percent of the country’s total imports, according to information the CNGOIC sent to the Global Times on Thursday.

In the same year, China imported 16.94 million tons of soybeans from the US, or 19 percent of its total imports, and bought 8.79 million tons of the crop from Argentina, taking up 10 percent.

On Wednesday, China released 500,000 tons of soybean strategic reserves into the market, according to chinagrain.cn.