Lower DDGS imports may encourage feed mills to use more soybean meal.
Forecast imports are up from the 83.2 million tonnes in 2015-16. However, the growth rate of soybean imports slowed due to a forecast recovery in domestic soybean production and China’s sale of oilseed and oilseed product reserves (soybeans and rapeseed oil), the report said. The recovery and reserve sales are absorbing market share for food soybeans and vegetable oils. Notwithstanding, forecast lower imports of distiller's dried grains with soluble (DDGS), as a result of China’s implementation of anti-dumping duties, may increase demand for soybean meal and could support continued growth in soybean imports.
According to the FAS, China’s recent announcement of anti-dumping and countervailing duties may have a negative effect on imports of DDGS. In September 2016, China imposed preliminary anti-dumping duties of 33.8% and countervailing duties ranging from 10% to 10.7%. These duties may change depending on China’s final determination, which is expected to be announced in early 2017. During the first 8 months of 2016, as the anti-dumping investigation remained pending during this period, China’s DDGS imports declined significantly, to about 2.4 million tonnes compared with the 4.3 million tonnes during the same period last year, the report said. Higher import duties on DDGS in 2016-17 may reduce imports from the recent average year of 5 million tonnes. Lower DDGS imports could encourage feed mills to use more soybean meal to supplement protein content in feed.
Nevertheless, the Chinese government’s decision to sell part of its 6 million tonnes of stored soybean reserves is expected to impact soybean import growth in 2016-17, according to the FAS. As of Sept. 23, 10 weekly auctions were held at relatively low prices with sales totaling 1.57 million tones. Auctions stopped temporarily to facilitate the marketing of the new 2016-17 crop but may resume at any time in 2017. The Chinese government continues to restrict the use of imported biotech soybeans for food processing, the report said. Despite quality concerns, the release of old soybean stocks at lower prices is expected to partly satisfy the domestic soybean market in 2017.