SOURCE / ECONOMY
Fluctuations in Chinese soybean futures do not indicate supply shortage: analyst
Published: Mar 01, 2021 09:29 PM
Soybeans are harvested in Heilongjiang province.File photo: Xinhua

Soybeans are harvested in Heilongjiang province.File photo: Xinhua





The short-term fluctuations in China's soybeans futures market do not indicate a supply shortage in soymeal, Chinese analysts noted, adding that the domestic soybean planting area will remain stable rather than being reduced as some foreign media indicated, and production will also be fully ensured.

The remarks came as in early Monday trading, the most active No.1 soybean contract for May 2021 delivery on the Dalian Commodity Exchange rose 2.5 percent to 6,058 yuan ($937.23) per ton, which Reuters said was due to a tight supply and a forecast of decreasing domestic soybean planting areas.

Fluctuations in the futures market do not represent the current supply and demand situation in the Chinese market, and China's soybean supply can be guaranteed, Li Guoxiang, a research fellow on agriculture at the Chinese Academy of Social Sciences, told the Global Times on Monday.

China will not massively increase planting area for soybeans in 2021, but it will also not reduce the planting area, Li said, adding that amid China's push for key technology breakthroughs in the seed industry, although planting areas remain the same, the soybean yield may be high, and its production may rise.

China's policymakers have stressed several times that China is set to accelerate innovation within the seed industry as the nation has vowed to turn the tables in tackling challenges in agricultural technology and food security.

In the No.1 document China's central government unveiled for 2021 on February 22, the government made its key work by illustrating its blueprint for the agriculture-breeding system.

The protection, development and utilization of agricultural germplasm resources should be strengthened and the implementation of major scientific and technological projects in agricultural biological breeding should be accelerated, the document reads.

Soybean imports will remain high, given the recovery of China's breeding industry, such as the hog industry and the stabilizing global industry chain as the pandemic eases, analysts said.  

Jiao Shanwei, editor-in-chief of cngrain.com, a website specializing in grain news, forecast that China's hog sector may fully recover from African swine fever in the middle of 2021, which may further push up  soybean imports.

China's soybean imports broke the 100-million-ton barrier for the first time in 2020, when they rose 13.3 percent from the previous year, according to data released by the General Administration of Customs.

Li forecast that this year, imports will remain at about 100 million tons. 

"As the China-US relationship gradually sees signs of improving, we expect that US soybeans will also see rising orders from China," Jiao said.

Zhao Xiangyu, chairman of Heilongjiang Province-based Liangtai Agriculture Co, told the Global Times on Monday that China's soybean imports will likely rise in 2021, but he would not estimate how much the increase will be. Zhao runs farms in Russia and engages in the cross-border trade of agricultural goods.  


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