Soybean import growth rate expected to slow due to domestic production.
The soybean import growth rate, however, is expected to slow due to a forecasted recovery in domestic soybean production and China’s sale of oilseed stocks and oilseed product reserves (soybeans and rapeseed oil), absorbing market share for food soybeans and vegetable oils. However according to the report, forecast lower imports of dried distiller’s grains (DDGS) as a result of China’s implementation of anti-dumping duties increases demand for soybean meal and thus could support growth in soybean imports.
On Sept. 23, nine months after China began its U.S. DDGS antidumping investigation, China announced a preliminary decision to impose 33.8% duty on DDGS, effective immediately. This decision comes after the U.S. launched trade enforcement action on Sept. 13 against China at the World Trade Organization concerning excessive government support for domestic wheat, corn and rice production.
The U.S. is the largest DDGS producer and has a surplus to export, while China is the biggest importer. DDGS is a byproduct of ethanol production used for animal feed.
According to China’s industry statistics, the profit margins for swine farmers in September declined slightly from August. The Chinese industry association estimated a slight fall in the 2016 pork production based on a slower recovery of the swine and sow inventory as the government intensified environmental management. Some sources, however, claimed the recovery might be higher than the official report driven by the constant high profit margins. Sows are transferred to central and north provinces with less environmental pressure and pigs are raised to higher weight in response to tight supply of piglets at high prices. Poultry production remained generally stable during August to September. According to the FAS, feed use during the month of September continues to grow as swine farmers continue to fatten pigs for the upcoming national day festival. In the second half of 2016, soybean meal use is expected to continue growing moderately.