China on Thursday cut its forecast for soybean imports for the 2018/19 crop year, warning that higher prices due to Beijing’s trade war with Washington will curb demand as farmers switch to alternative ingredients for their animal feed.
Imports of soybeans in the crop year that starts on October 1 would be 93.85 million tonnes, down 1.8 million tonnes, or 2 per cent, from last month’s estimate, the Ministry of Agriculture and Rural Affairs said in its monthly crop report.
That compares with its estimate of 95.97 million for the 2017/18 crop year and would be the lowest import level since the 2016/17 year, according to US government records.
The ministry’s Chinese Agricultural Supply and Demand Estimates (CASDE) report said new 25 per cent tariffs on US shipments introduced last week would inflate prices of the oilseed.
Meanwhile, crushers that make meal and oil from the beans will process fewer beans in favour of other protein substitutes. Meal made from rapeseed, peanuts and sunflower seeds are expected to be popular alternatives.
The government also cut its soybean consumption forecast by 2 per cent from the previous month’s outlook to 109.23 million tonnes. That would still be 1 per cent higher than consumption in the 2017/18 crop year.
China on July 6 imposed 25 per cent tariffs on US$34 billion in US goods, including soybeans, in response to US duties imposed the same day on Chinese products worth a similar value, as the world’s top two economies headed into an outright trade war.