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IKAR in Mass Media

China warned it should not pin its hopes on Russian soybeans plugging supply gap caused by US trade war

20 августа 2019 года

* Russian expert told China industry delegates that his country struggles to produce enough to satisfy its own demands, much less its neighbour’s
* China has been looking for alternative sources after falling US supplies left its farmers with a major headache

Russian soybean exports to China are likely to remain low for the next few years, an agricultural specialist has warned, suggesting that amount produced will not be enough to provide a real alternative to the United States.

China suspended purchases of US soybeans and other farm products this month after US President Donald Trump threatened to impose more tariffs on Chinese products, compounding the shortages caused by 25 per cent tariffs on the crop that have been in place since July last year.

Russia is one of the many alternative sources China has been exploring since the start of the trade war and last month it approved imports of soybeans from all parts of Russia, opening itself up to supplies from the European part.

Although Russia’s overall production of the crop – a vital food source for farm animals – is much lower than America’s, some in Beijing hoped its northern neighbour would be able to make a significant contribution in future.

Last month China’s Commerce Minister Zhong Shan said the country hoped to “deepen its trade in soybeans” with Russia after a meeting with his counterparts in Moscow, days after Rusagro, a Russian agricultural exporter,had shipped its first bulk vessel of soybeans to China.

But Dmitry Rylko, director general of the Moscow-based Institute for Agricultural Market Studies, said Beijing should not pin its hopes on this new source of supplies. “In the next few years, European Russia’s soybean exports to China may be very low,” Rylko told an annual gathering of Chinese soybean growers, traders and officials in Harbin, the capital of Heilongjiang on the border with Russia, on Friday.

He said soybean output in the European part of Russia would not be able to satisfy domestic demands until 2024, despite an increase in plantation areas.

Since Russia still needs to import soybeans to fulfil its own needs, it was unlikely to provide an effective answer to China’s problems, Rylko added.

He also warned that many of the European soybeans were not of particularly high quality because they were relatively low in protein.

He predicted that the best-case scenario would see Russian soybean exports reaching 2 million tonnes a year – a significant rise on last year’s total of 800,000 tonnes.

However, that is still a drop in the ocean compared with China’s annual consumption of more than 100 million tonnes – some 88 per cent of which were imports, including 16 million tonnes supplied by the US.

Chinese Customs figures also show that between October last year and March this year, Russian soybean imports actually fell – from 589,000 tonnes to 469,000 – compared with the previous period last year.

However, there is still strong Chinese interest in developing Russia as a supply base.

https://scmp.com/

Source: scmp.com  |  #oilseeds   |  Comments: 0   Views: 49

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