Chinese farmers to grow up to 15% less soy in 2015/16

Farmers in China, the world's top buyer of soybeans, could slash the amount of land they use to grow the oilseed by as much as 15 percent in 2015/16 due to uncertainty over how a new subsidy scheme will work, industry analysts said.

A sixth straight annual drop in soy acreage could boost imports by a country that already accounts for 65 percent of global traded volumes, buoying international prices that are hovering near four-year lows on ample global supply.

"Farmers will reduce soy acreage as they so far have no idea how they will be subsidized," said Liang Yong, a Galaxy Futures analyst based in Heilongjiang, the country's top soy growing province.

Beijing scrapped a soy stockpiling program last year, and said it would subsidize farmers if domestic prices dropped below a target price of 4,800 yuan per tonne. But it is yet to reveal the size of those subsidies, even as farmers begin sowing this month with prices currently around 3,600 yuan.

Galaxy said acreage could fall by 15 percent, while initial estimates from the China National Grain and Oils Information Center (CNGOIC) and Beijing Orient Agri-Business Consultant Co. Ltd put the drop at more than 10 percent.

Analysts said that acreage in Heilongjiang could decline as much as 30 percent in the 2015/16 marketing year, with farmers shifting to corn and rice.

Farmers can make 5,000 yuan ($806) more per hectare of corn than by growing soybeans, said Liu Min, a farmer with Sunwu Soybean Association in the far north of Heilongjiang, bordering Russia.
"Farmers here now have more choice and they are choosing to grow corn instead of soy," he said.

The U.S. Department of Agriculture has forecast China's 2014/15 soy imports at 74 million tonnes, up from 70.36 million tonnes the year before.