China’s Soybean Import Surge in 2023


Jun 28, 2023 | Agricultural Markets News

Reading time: 2 minutes

As the world’s leading importer of soybeans, China’s market is set for another year of significant imports in 2023, and numerous key factors are influencing its future course. In 2022, the total value of U.S. soybean exports was an impressive $34.39 billion, with China accounting for a whopping $17.87 billion of the total figure. As we sail into 2023, the outlook seems promising yet complex, influenced by an array of internal and external factors.

Analysts expect a recovery in China’s soybean imports in 2023, driven by improved margins, a rise in the animal feed sector, and a need to replenish state reserves. Forecasts hint at a growth of 8.3% year-on-year, reaching a hefty 98 million metric tons. Data from Q2 2023 exemplifies the diverse global network that underpins China’s soybean demand. For instance, Brazil, a significant contributor, shipped approximately 11.9 million metric tons to China in May, overshadowing Argentina, the United States, and Russia, which shipped lesser volumes, according to AgFlow data.

Forecasts by the U.S. Department of Agriculture (USDA) suggest that China’s soybean demand will climb due to rising feed demand, limited availability of protein-rich substitutes, and higher prices, potentially pushing up soybean imports by 7 million metric tons in 2023 compared to the previous year. This growth in demand is spurred by increased hog inventories and higher output from the poultry, ruminant, and aquaculture sectors. Moreover, with China processing over 80% of its imported beans into animal feed, soybean crush margins are set to improve from Q2 2023 onwards.

Global events such as the recent Russia-Ukraine war and a worldwide drought in 2021 have also made their mark, sending agricultural commodity prices to multi-year highs. This could lead to a higher soybean demand in 2023 due to the unavailability of cheap feed alternatives. Conversely, a potential supply glut resulting from a strong Brazilian harvest in 2023 could offset this demand, posing a challenge to the global market’s absorption capacity, including China’s.

Adding another layer to this complex picture is the impact of COVID-19. Beijing’s zero-COVID policy strained China’s soybean demand in 2022, causing an 8% drop between January to November. If COVID-19 continues to disrupt China’s economy in 2023, its soybean demand could be cut to 96-97 million metric tons.

In conclusion, the 2023 outlook for China’s soybean market is shaped by a blend of domestic demand, global supply situations, and the unpredictable influence of the COVID-19 pandemic. While trends indicate a recovery in imports and a rise in demand, uncertainties loom, requiring market participants to remain vigilant and adaptable. While this analysis provides an insightful overview, the exact situation will depend on numerous factors, many of which could change over the year.

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