According to CRI, the annual production volume of soybeans is estimated to be lower than 13 million tons in China in recent years. However, as the economy develops and the living standards increase in China, the annual demand for soybeans keeps rising, exceeding 100 million tons in 2017. Obviously, the homegrown soybeans cannot satisfy the domestic market demand, so China has to import numerous soybeans every year. In 2017, the import volume of soybeans in China totaled 95.535 million tons, increasing by 13.85% YOY. The import value reached USD 39.62 billion, increasing by 16.63% YOY. At present, China has a single source of imported soybeans, mainly comprising Brazil and the U.S. In 2017, Brazil was the largest source of imported soybeans to China, the import volume from which reached 50.928 million tons. The U.S. ranked second, and China imported 32.854 million tons of soybeans from the country in 2017, with the import value amounting to USD 13.933 billion. Both the import volume and import value accounted for more than 1/3 of those of the domestic soybeans.
Based on the analysis of CRI, if China reduces the imported soybeans from the U.S. and increases imports from other countries, there will be two problems: (1) increasing prices of the suppliers from other countries; (2) and lack of reliable alternative sources in China. As the largest source of imported soybeans to China, Brazil has produced approximately 100 to 110 million tons of soybeans a year in recent years. Because of more than 200 million population and the advanced animal husbandry, the country itself also needs to consume a number of soybeans. In 2017, the export volume of soybeans in Brazil reached about 57 million tons, almost 90% of which was exported to China. Supposing that the import volume of soybeans from the U.S. to China decreases by a half YOY in 2018, totaling about 16.4 million tons, the imports from Brazil can only fill up the gap of 6 million tons, while the rest 10.4 million tons will be a big loss that is difficult to compensate for. There is an opinion that Russia can be an alternative importer, but China only imported 0.51 million tons of soybeans from the country in 2017, accounting for about 0.5% of the total import volume. The production volume of soybeans in Russia even totaled no more than 4 million tons in 2017. Unlike the industrial goods, agricultural products are hard to rapidly increase the production capacity, because the production volume is greatly influenced by natural conditions. Besides, it is also impossible for the suggestion that the domestic migrant workers return to the rural areas for soybean planting or go to the Russian Far East to open up wasteland for soybeans.
CRI report also suggests that tax on the imported soybeans from the U.S. will lead to the increase in prices of both imported soybeans and domestic ones. Admittedly, the rising prices will influence the downstream of the industry, such as processing industries of soybean oils, bean products and feeds. As a consequence, ordinary consumers will have to face the higher prices of edible oil and food. In addition, the CPI and even the inflation level will also rise to a certain extent. However, as for the low-income people, their living standards will decline. Soybean belongs to a basic agricultural product instead of luxury goods. For the Chinese enterprises and consumers, soybean oil is an important source of edible oil and bean products are also the significant food. On top of this, the pig raising, poultry raising and aquaculture industries are inseparable from the high-quality feed of bean pulp. With the support of imported soybeans, the production volumes of pork, poultry meat and eggs and aquatic products in China can all rank top in the world. If there is a shortage of soybeans in the Chinese market and the rapid increase in soybean prices, only a few of soybean importers and distributors can earn huge profits. In fact, it will be harmful to the interests of most people.