China and Russia plan to form an industrial alliance for the production of soybeans

China is trying to diversify its supply for food security.

At the moment, the share of soybean imports from Russia in the total supply of this crop is about 1 percent.

But this does not prevent China from making plans for long-term cooperation with Russia, assuming that by 2024 soybean imports to China will increase to 3.7 million tons.

China imports 80 — 90 million tons of this crop annually, and for a long time Brazil and the USA remain the main suppliers.

They account for over 90% of imports. And now the United States is the main supplier, due to the fact that prices for Brazilian soybeans have gone up sharply: its domestic stocks have decreased.

On the other hand, in the United States, the maximum harvest is expected over the past five years — accordingly, prices for soybeans are very attractive.

China consumes 110 million tons of oil crops annually — it is used not only for oil production, but also in animal feed due to its high protein content.

Despite the increase in cultivated areas (and in 2019 they amounted to 9.3 million hectares, although earlier this figure did not exceed 6.7 million hectares), the country produces only 16 million tons of soybeans.

The Chinese representatives rightly believe that in the current economic conditions, dependence on imports from certain countries poses a threat to food security, therefore, they seek to diversify risks.

During the pandemic, Russia stopped the supply of grains, including soybeans, abroad for three months, so the volume of shipments of this crop in the 2019/2020 agricultural year slightly decreased compared to the previous agricultural year:

2018/2019 — 704 thousand tons

2019/2020 — 678 thousand tons (- 3.7%).

At the same time, the volume of supplies to China decreased by 37%.

And the supply of soybean oil, on the contrary, increased by almost 50% — from 152 thousand tons to 230 thousand tons, bringing China to the first line in the ranking as its importer.



(Analytics based on the Logistic OS platform)

Analysts say Russia is unlikely to be able to replace America as the main supplier of soybeans in the short term, but the creation of such an alliance is strategically important for China, as a gesture aimed at strengthening cooperation between the two countries.

It should be noted that Chinese farmers have been renting land for sowing soybeans for several years, in particular, in the Jewish Autonomous Region.

Moreover, unlike Russian farmers, they were not afraid to go to the most swampy and inaccessible land plots.

By last year, the area of ​​Chinese farms occupied by this Shrovetide was 46.8 thousand hectares, and the floods left only 38.8 thousand hectares, from which 24.2 thousand tons were collected — six times less than usual.

And this year the main problem was the pandemic, due to which many migrants were unable to return to Russia after the Chinese New Year.

Cooperation with Chinese farmers is attractive for Russia because they are ready to invest large sums in land.

And strengthening cooperation within the framework of new agreements will be beneficial for both countries.