Summary of 2021 Chinese soybean industry and 2022 forecast

1.Analysis of soybean supply in China 

1)Planting area

In 2021, China’s domestic soybean planting area decreased. Soybean and corn are in competition against each other in the use of planting area. Over recent years, farmers have been positive toward corn planting, coupled with the obvious price advantage of corn in 2020. The soybean planting area in 2021 decreased, being only 8.4 million hectares, a decrease of 1.483 million hectares over the previous year, down 15% year on year.

2)Per-unit yield

As of 2015, the average yield of soybean in the United States reached 3,200 kg/hectare, that is, 213.5 kg/mu (1 mu = 1/15 hectare), which used to be 238 kg/mu in 2018. From 2015 to 2019, the average yield of soybean in the United States was 221.5 kg/hectare per mu, which in general stayed stable with slight increases. In 2020, the average yield of soybean in China was only 132 kg per mu.

In 2021, Chinese soybean yield was 1,950 kg/hectare, a decrease of 33.5 kg per hectare over 2020, at a year-on-year decrease of 1.6%.

3)Production output 

In recent years, Chinese soybean production has been growing rapidly, with production output reaching 19.6018 million tons in 2020, an increase of 1.51 million tons over 2019, an increase of 8.35% year on year. In 2021, Chinese soybean production was affected by the reduction in planting area, having declined significantly, with output being lower than 2019.

2.Demand analysis

While people’s consumption demand for meat, egg, milk, aquatic product, soybean products and edible vegetable oil is increasing, soybean demand is rising steadily. Chinese soybean demand in 2020 reached 119.852 million tons, an increase of 13.393 million tons over 2019, at an increase of 12.5% year on year. It is predicted that China’s soybean demand may decline slightly in 2021, down to 111.257 million tons, which will be a decrease of 8.624 million tons over 2020, at year-on-year decrease of 7.19%.

In terms of China’s soybean consumption in 2020, 83.7% consumed in China relied on import while self-production was only 16.3%.

3.Analysis of import and export 

1)Import

China is one of the world’s prime importing countries of soybean. Chinese soybean production has greatly increased in recent years, but the strong demand from domestic market has made China to strongly depend on import, with constant increases in soybean import. China’s soybean import in 2020 reached 100.33 million tons, an increase of 11.7413 million tons over 2019. In 2021, China’s soybean import was 96.518 million tons.

In 2020, China’s soybean import value amounted to $39.52 billion, up 11.8% year on year; in 2021, China’s soybean import from January to November was $67.87 billion.

The major source countries for soybean import from January to October 2021 were Brazil (66.1% of total import), the United States (28.6%) and Argentina (3.1%).

2)Export

Due to lack of technology, the per-unit yield, oil yield and protein rate of soybean in China are far lower than those of the United States, thus being not competitive in the international market. In 2020, China’s soybean export was 79,500 tons, a decrease of 34,900 tons over 2019. In 2021, China’s accumulated export of soybean from January to October was 50,200 tons, down 15.8% year on year; the export value was $55.0083 million, at an increase of 8.7% year on year.

4.Price trending

From the price standpoint, since the beginning of February 2021, the reference price of soybean has continued to go high, which was Yuan6.062 per ton on December 8, 2021, an increase of Yuan962 per ton over January 1st, 2021 and an increase of Yuan1,162 per ton over the same period in 2020.

Since the market launch in the new season, the price of soybean has been constantly rising, having arrived at new high in a 10-year period. At present, the average price of soybean is close to Yuan5,500 per ton, at an increase of 50% or above over 2019. The price of the third-class domestic soybean in Heihe, Heilongjiang, is close to Yuan6,000 per ton, whilst the price of imported soybean in Shandong once reached Yuan4,700 per ton. In general, the soybean price remains currently very strong.

5.Soybean industry prospect 

1)Soybean will continue to be imported in large quantities

China is a place of origin of soybean, but soybean production accounts for less than 10% of the world’s total production output. China has a low self-sufficiency rate, where demand and import both rank the first in the world. China’s production output is low and the demand is high, which cannot be fulfilled by expansion of production. This is due to China’s small cultivated land area, which is currently around 2 billion mu, being less than 1.5 mu per capita and only half of the world’s per capita level. If the soybean demand is required to be met by domestic production, the soybean planting area needs to take half of the cultivated land of the country. Moreover, the output value of soybean per unit is low, which is 1/4 lower than that of cereals. Therefore, it is foreseen that China’s long-term trend of soybean supply will not change and will still rely on import.

2)High price to remain in domestic market but may fluctuate in international market 

On the domestic market, soybean price is quite high; traders and processing enterprises are not active in purchasing. It is expected that the price rise in the domestic market will be limited. On the international market, there is a plentiful supply of soybean in the United State. In South America, soybean planting is progressing quite well; the global soybean supply and consumption are in a good balance. However, due to the COVID-19 pandemic and weather uncertainties, it is foreseen that international soybean price may show certain degree of fluctuation.