China to plant more soy, speed up GMOs to ensure food supply

BEIJING (Reuters) - China will increase its efforts to boost the output of soybeans and edible oils, state media reported late on Monday, citing a key rural policy document, as it continues to push for greater self-sufficiency in its key food supplies.

Bottles are filled with soybean oil made from the U.S. imported soybeans on a production line at a plant of Liangyou Industry and Trade Co., Ltd in Qufu, Shandong province, China July 4, 2018. REUTERS/Jason Lee/Files

The world’s top soybean buyer is trying to lower its heavy reliance on imports of the oilseed as the COVID pandemic, growing trade tensions and increasing climate disasters raise concerns about feeding its 1.4 billion people.

In its annual rural policy blueprint, known as the “No. 1 document”, the State Council, China’s cabinet, reiterated a recently stated goal to boost grain production capacity by 50 million tonnes, from current production of more than 650 million tonnes, state news agency Xinhua reported.

“The primary task of a strong agricultural country is to ensure national food security,” Agriculture Minister Tang Renjian said at a news conference on Tuesday on the policy blueprint. His comments referred to the central government’s stated plan to build a “strong agricultural country” to support China’s development.

China set a goal for expanded soybean output in 2022 and the country increased its acreage of the oilseed by 22% last year.

To help raise soybean output, the document called for the continued promotion of intercropping soybeans with corn and developing saline land for soybeans, Xinhua reported.

China will also seek to raise corn yields, further support wheat farmers and “vigorously” promote rapeseed production on fallow land during winter months, as well as lesser known oilseed crops such as camelia, according to the document.

However, “China’s biggest problem is not how much area to plant, but how to achieve technological progress,” said Ma Wenfeng, senior analyst at Beijing-based agriculture consultancy BOABC, noting that corn yields in China were much lower than in the United States.

Lifting yields requires an overhaul of the industrial structure and system, he said, with many farmers still migrating to cities to find work, leaving only elderly people with little education farming the land.


Beijing plans to speed up the pace of commercialisation of biotech corn and soybeans, according to the document, which should eventually help raise yields, though only to a certain extent, said Ma.

No time frame was provided for the launch of genetically modified (GMO) corn and soybeans, but many in the market expect a launch this year.

“We believe that 2023 has a high probability of becoming the first year of China’s biological breeding industrialization,” said analysts at Citic Securities in a note on Tuesday, noting that the 2022 policy document had not mentioned biotech industrialisation.

Shares of leading seed companies fell on Tuesday, however, as the market had already priced in expectations of policy support for commercialising GMOs, said a Shanghai-based equity analyst, who asked to remain unidentified because of company policy.

Beijing Dabeinong Technology Group Co Ltd fell 6.7% while Yuan Longping High Tech Agriculture was down almost 5%.

Additionally, the policy document said China will fully implement a campaign to reduce soymeal rations in feed, another move to lower its reliance on soybean imports.

However, it acknowledged the role played by trade and said it would “implement the diversification strategy of agricultural product imports thoroughly”.

The document also outlined plans to protect soil and conserve water, while strengthening controls on the use of arable land.

It also called for the further development of indoor farms, with plans to explore building such facilities in the Gobi and other deserts.

Reporting by Dominique Patton; Editing by Shounak Dasgupta, Bradley Perrett and Christian Schmollinger