EXPORTING SOYBEANS TO CHINA
In terms of volume, soybeans are the fourth-ranked cropped produced in the world.
As previously stated, the crop can be consumed directly.
85% of it is processed after the bean
is crushed to form soybean meal and oil.
The soybean meal is most used as animal feed,
while the oil is used for human consumption. Soybeans and their products are the most
frequently traded agricultural product in the world as they account for more than 10% of the
global trade on farm products.
The demand for soybeans and their products has been rising
since the 1990s except for a few drops that are mostly associated with trade relations between
The trade-in Soybean is expected to continue growing into the future according to
a report by U.S.D.A. Agricultural Projections.
As the income of people rise, it is causing an
increase in the rate of meat consumption, which demands higher livestock products, which in
turn boosts the demand for soybeans.
It is a trade that is affected by both domestic and
foreign trade policies since the product is internationally traded to areas with the highest
demand, such as China.
To best understand the market, we will look at a brief history of the
Soybean market in China.
Soybean production and trade is not a new phenomenon in China as the crop has been
part of the Asian diet for thousands of years.
However, the high demand for soybeans in
China started skyrocketing in 1976, which meant that farmers had to increase their soybean
production substantially (Blyde, Iberti & Mussini, 2018).
From 1976 to 1981 the production
increased by 41%. However, this was not the highest production witnessed in the country that
had its peak in 1954 when it produced 44% of soybeans in the world.
The growth of output
continued, but the demand for soybeans increased at an even higher rate both as a result of
population increase and an increase in the need for more livestock production such as pigs
This increase meant that soybean production in the country was not enough to
cater to the demand, and in the 1990s, the importation of soybeans started to increase