China's import of soybean is estimated to hit a historic high in 2012, and the high reliance on imported soybean may bring risks to China's edible oil security.

1. High Reliance on Imported Soybean Affects China's Edible Oil Security
Summary: China's import of soybean is estimated to hit a historic high in 2012, and the
high reliance on imported soybean may bring risks to China's edible oil security.
Tag: agriculture, investment, soybean, oil, demand, import, planting area, consumption, output,
production
According to statistics from China Customs, in the first half of 2012, China imported 29.05 million
tonnes of soybean, up 29.05% over H1 2011. Since the planting area of soybean in China has
decreased this year, it's estimated that China's import of soybean will set a new record in 2012,
and the high growth of import volume in H1 2012 is a signal, according to CCM’s July issue of
AgriChina Investor.
Soybean is a major source of edible oil in China. With the increasing demand for edible oil from
urban residents and the declining planting area of soybean, China's import of soybean has been
increasing year by year over the past decade.
Since 2003, China has surpassed the European Union and become the largest soybean importer
in the world. In 2010, China's soybean import volume hit a historic high of 54.80 million tonnes. In
2011, it decreased slightly by 3.9% to 52.64 million tonnes. The import volume of soybean in
China climbed by 90% from 2004 to 2010.
According to the data from China's National Grain and Oils Information Center, the annual
consumption volume of edible oil in China reached 20.5kg per person in 2011.
China mainly imports soybean from the U.S., Brazil and Argentina, where the GMO soybeans are
planted the most extensively. The U.S., a country with the largest planting areas of soybean in
the world, has supplied about a quarter of its soybean output to China.
Imported soybean now accounts for about 80% of China's total soybean consumption. Compared
with more than 50 million tonnes of imported soybean every year, China's domestic output of
soybean has been about 12 million tonnes per year in recent years.
Driven by the increasing urbanization rate and hence the increasing demand from urban
residents in China, China's soybean import volume is expected to maintain an uptrend in the next
10 to 15 years. According to a forecast from the U.S. Department of Agriculture, China's import

2. volume of soybean is expected to go up by 62% to 90 million tonnes per year over the next 10
years.
China's soybean growing industry has been greatly affected by the increasing import volume of
soybean. As imported soybean has advantages in cost (because of high farming efficiency in
major soybean planting countries) and high oil yield (because of the adoption of GMO seed; but
GMO soybean is prohibited to be planted in China), domestic soybean growing industry is beaten
by imported product, and many Chinese farmers are unwilling to grow soybean.
The decreasing output of domestic soybean and the increasing soybean import also impact
China's oil crushing industry. It was reported that more than 80% of the soybean oil crushers in
Heilongjiang Province, China's largest soybean production base, have closed down due to the
decline in both planting area and output of soybean in the region in 2011, and many of the
soybean oil producers have been relocated to coastal areas and begun to use imported soybean
as their raw materials.
The heavy reliance on imported soybean brings great risks to the food security of China and the
price stability of edible oil. Now many foreign companies have extended and integrated the
industrial chain of soybean in China, thus dominating the pricing rights of China's edible oil
market; more than 75% market share of soybean oil market in China is controlled by overseas
brands. Most price rise of edible oil in the end market in recent years are initiated by overseas
companies. Edible oil's price, which is included in China's CPI contributing factor, is highly related
to society sustainability.
As soybean is not included in grain in Chinese government's statistical system, the high reliance
on soybean import may be ignored if focus is only put on China's grain sufficiency rate. Many
experts suggest that grain security-related governmental departments in China should concern
more about the soybean import.
Source: AgriChina Investor 1207
http://www.cnchemicals.com/Newsletter/NewsletterDetail_192.html
Content of AgriChina Investor 1207:
Chuying Agro-Pastoral's rapid expansion faces challenges
Shenzhen Jinxinnong invests in capital preservation financing product
Arla Foods strengthens its presence in China

3. Muyuan Foodstuff's IPO approved
Big buyers increase in domestic crop protection market
U.S. drought not to push up China's grain price
China's cotton import volume up 130.2% in H1 2012
Brief introduction to China's direct subsidies for farmers
High reliance on imported soybean affects China's edible oil security
Investment in leisure agriculture to become hot in China
Why companies in other industries set foot in agricultural business?
Chinese farmers often experience poor sales of agricultural produces
Guangdong Dahuanong to accelerate aquaculture vaccine commercialization
Minsheng Banking opens financial centers for tea and fishery
Imp.&exp. value of China's agricultural produces up 18.4% in Jan.-May 2012
Flood may drag down China's autumn grain yield
……
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