Economic Daily:

Soybean is the largest variety of grain imports in China, and it is also mentioned many times in the "No.1 central document" this year. What China's current soybean market situation? What measures will the government take to enhance the stability and resilience of the soybean supply chain? Thanks.

Lu Jingbo:

Thanks for your question. Let me introduce the relevant situation. The CPC Central Committee and the State Council attach great importance to the security of soybean supply and have introduced a series of policy measures in production, processing, reserves, trade, import, and export in recent years. This year, the "No.1 central document" has made special arrangements for expanding soybean oilseeds and revitalizing the seed industry, providing a fundamental basis for further improving China's comprehensive guarantee capacity of soybean supply.

China's soybean market has two sources of supply: domestic and import, and there are certain differences between the two in function, market price, market demand and etc. Domestic soybeans are mainly used for food, like bean products, soybean milk, tofu, etc., with an annual consumption of 13 million to 15 million metric tons, and the domestic output can fully meet the demand in this regard; Imported soybeans serve chiefly as oil extraction and feeding, and the soymeal after oil extraction is used as raw material for feed production. Overall, the current situation of China's soybean market can be summarized as "two-sided sufficiency and overall stability," which means that there is a sufficient supply of domestic soybeans, a sufficient supply of imported soybeans, and overall stable market purchase and sales. From a domestic perspective, China's soybean production reached a historic high in 2022, exceeding 20 million metric tons. After fulfilling food consumption needs, there was still approximately 5 million metric tons of surplus, ensuring full market supply. From the perspective of imports, the global soybean supply-demand relationship is relatively loose. International agencies predicted that the global soybean production in 2022/23 would be approximately 370 million tons, reaching a historic high; the consumption volume would be 366 million tons, resulting in a surplus of over 3 million tons. This provides a solid foundation for China to effectively utilize both the international and domestic markets to meet its domestic consumption needs. From the perspective of market purchase and sales, the acquisition work of new soybean has maintained a stable and rapid momentum since it came into season. At the end of March, the peak season of soybean procurement was over, and companies in main soybean-producing areas had accumulated a total procurement of 4.18 million metric tons of new soybeans, an increase of 1.71 million metric tons year on year. At the same time, relevant departments in the early stage launched the new domestic soybean procurement work in the main soybean production areas of Heilongjiang and Inner Mongolia, which effectively stabilized market expectations.

To enhance the stability and resilience of the soybean supply chain, relevant departments of the state have taken a series of measures. The first is to increase production capacity, continue to promote the project of increasing soybean and oil production capacity and improve the production level and supply capacity of domestic soybeans. Meanwhile, we have improved policies on subsidies for soybean producers to make farmers benefit from planting soybeans. The second is to facilitate processing, implement actions of promoting agricultural product processing, optimize industrial layout, guide large enterprises to develop deep processing, enhance their competitiveness, and create well-known domestic soybean brands. The third is to promote reasonable consumption. We have promoted conservation and loss reduction in all links of the soybean industry chain, encouraged feed breeding enterprises to optimize, and adjust feed protein content as well as advocated for residents to adopt a healthy diet, reduce oil consumption, increase greenery, and encourage healthy consumption of vegetable oils. The fourth is to stabilize imports, strengthen international cooperation, and explore emerging soybean source markets while stabilizing the traditional soybean source market, promoting the diversification of import sources. Thank you.