China wants to curb soy­abean con­sump­tion amid trade war

Agri­cul­ture min­istry fears that coun­try’s over­all yearly con­sump­tion of soy­ameal may fall by 11 mil­lion tonnes

The Gulf Today - Business - - INTERNATIONAL -

BEIJING: Oilseed traders in China on Mon­day played down the po­ten­tial im­pact on soya con­sump­tion of new govern­ment guide­lines to lower the pro­tein con­tent of an­i­mal feed, say­ing that ris­ing soy­ameal and soy­abean prices would be a far big­ger curb on ap­petite.

The na­tion has been pur­su­ing mul­ti­ple ways to re­duce its con­sump­tion of feed ingredient soy­ameal, made from soy­beans, amid a fes­ter­ing trade war with the United States, its No.2 sup­plier of beans.

China, which typ­i­cally buys about two thirds of glob­ally traded soy­abeans to help feed its huge live­stock herd, has been tak­ing steps such as turn­ing to al­ter­na­tive meals and re­duc­ing pro­tein lev­els in feed.

China’s Feed In­dus­try As­so­ci­a­tion on Fri­day ap­proved new stan­dards for feed for pigs and chick­ens, low­er­ing the pro­tein lev­els in pig feed by 1.5 per­cent­age points and those for chick­ens by one per­cent­age point, the agri­cul­ture min­istry said in a state­ment that day.

The stan­dards are only guide­lines and the min­istry did not say when they would take ef­fect, with traders say­ing that prices would con­tinue to be the key fo­cus for soymeal con­sumers.

“The new stan­dards are not en­force­able (as they are based on guide­lines),” said a soy­bean trader in China, de­clin­ing to be iden­ti­fied due to the sen­si­tiv­ity of the mat­ter.

An­other trader, based in Beijing, said that most big feed mills were al­ready us­ing less soymeal than last year be­cause prices had risen ver­sus 2017. The most ac­tively traded soymeal con­tract on the Dalian Com­mod­ity Ex­change has climbed 20 per cent since the start of the year to record lev­els of more than 3,300 yuan ($474.37) per tonne.

“They (mills) were also able to find sub­sti­tutes. Soy­ameal con­sump­tion is based on the soy­ameal price and the price of sub­sti­tutes,” he said.

Those com­ments came even as the govern­ment said on Fri­day that the new stan­dards would cut China’s an­nual con­sump­tion of soy­abeans by 14 mil­lion tonnes, mark­ing a drop of about 13 per cent from the last crop year in the world’s top buyer of the oilseed.

The min­istry also said that China’s over­all yearly con­sump­tion of soy­ameal would fall by 11 mil­lion tonnes. The coun­try used 71 mil­lion tonnes of soymeal to make an­i­mal feed in the 2017-18 crop year.

The agri­cul­ture min­istry said China de­pended on im­ports for nearly 80 per cent of its pro­tein raw ma­te­ri­als, and that this had caused a “bot­tle­neck” to de­vel­op­ment of the coun­try’s feed and live­stock sec­tors.

Low­er­ing pro­tein lev­els in feed would also re­duce the neg­a­tive im­pact on the environment, it said.

The Na­tional De­vel­op­ment & Re­form Com­mis­sion (NDRC) - the state eco­nomic plan­ner - in July dis­cussed ways to switch up pigs’ di­ets with ma­jor feed­mak­ers in­clud­ing New Hope Group, Dabeinong, CP Group and He­feng Group.

China is en­ter­ing what is typ­i­cally its top buy­ing sea­son for US soy­abeans.

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