May 10, 2018 / 4:59 AM / 6 months ago

UPDATE 2-China set to trim 2018/19 soybean imports as trade row boosts prices

    * China 2018/19 soybean imports seen down 0.3 pct on year
    * Decline by world's top buyer would be first in 15 years
    * Trade spat has pushed up soymeal prices, curbing demand
    * Domestic output also set to rise by 4.9 pct

 (Adds table, details on impact on exporters, hog prices and
feed alternatives)
    BEIJING, May 10 (Reuters) - China will cut its soybean
imports for the first time in 15 years in 2018/19, the
agriculture ministry forecast on Thursday, as a trade spat with
the United States pushes pig farmers in the world's top buyer to
seek cheaper proteins.
    In its first predictions for the upcoming crop year which
starts in October, the Ministry of Agriculture and Rural Affairs
said soybean imports were expected to dip 0.3 percent to 95.65
million tonnes.
    That would be the first decline since 2003/04, according to
data from the United States agriculture department.    
    
    
    The forecast will unnerve top exporter Brazil, which has
harvested a record crop this year. It will also add to worries
for farmers in the United States, who have already seen exports
to China dry up after Beijing threatened to slap an additional
25 percent tariff on U.S. soybeans, in retaliation for trade
actions taken by President Donald Trump.

    The threat of hefty tariffs has pushed up the price of
soymeal and sent feedmakers scurrying to source alternative
sources of protein for farmers already grappling with hog prices
at multi-year lows. 
    Live hog prices in China plunged by around 30 percent in the
first quarter, one of the steepest declines ever recorded, after
a significant increase in production by new farms boosted pork
supplies.
    Prices are still at eight-year lows, with producers across
the board losing money, and most expect losses to continue into
next year.
    "While the development of livestock farmers is driving an
increase in consumption of feed raw materials, the fall in
profits for pig farming will lead to reduced use of protein in
feed, and in addition to higher supply of DDGS and other meals,
demand growth of soymeal will slow," said the ministry.
    China is expanding production of ethanol under a new policy
to boost the consumption of corn. The push will see higher
supplies of the ethanol byproduct, dried distillers grain
(DDGS), reaching the animal feed market.
    China's own soybean production is also set to grow, with
2018/19 output forecast to rise 4.9 percent to 15.27 million
tonnes, the ministry said.
    Soybean farmers are getting additional support following the
launch of an "emergency" campaign this month to boost output.

    Soybean acreage will increase by 7.8 percent to 8.39 million
hectares (20.7 million acres), although lower rainfall in Inner
Mongolia will curb yields. 
    Higher subsidies for soy farmers will eat into corn planting
however, with output set to fall 2.9 percent to 210 million
tonnes, it said.
    "Relatively severe" drought in some parts of the northeast
was also expected to hurt corn yields.
    Beijing has embarked on a major push to reduce its corn
planting to whittle down a huge overhang of stocks, while
supporting soybean planting in its place.
    
    Key numbers from the Chinese Agricultural Supply and Demand
Estimates (CASDE) 
                   2017/2018      2017/2018         2018/19
                 (forecast in    (forecast in     (forecast in
                    April)           May)             May)
      Corn                                              
    Planted          35.45          35.45            34.95
  acreage (mln                                  
   hectares)                                    
  Output (mln       215.89          215.89           209.53
    tonnes)                                     
  Imports (mln       1.50            1.50             1.50
    tonnes)                                     
 Ending Stocks       -6.72          -6.42            -2.00
  (mln tonnes)                                  
    Soybean                                             
    Planted          8.10            7.78             8.39
  acreage (mln                                  
   hectares)                                    
  Output (mln        14.60          14.60            15.27
    tonnes)                                     
  Imports (mln       95.97          95.97            95.65
    tonnes)                                     
 Ending Stocks       -0.22          -0.31            -0.50
  (mln tonnes)                                  
     Cotton                                             
    Planted          3.35            3.35             3.19
  acreage (mln                                  
   hectares)                                    
  Output (mln        5.89            5.89             5.55
    tonnes)                                     
  Imports (mln       1.10            1.10             1.20
    tonnes)                                     
 Ending Stocks       7.52            7.52             6.01
  (mln tonnes)                                  
     Sugar                                              
    Planted          1.46            1.46             1.52
  acreage (mln                                  
   hectares)                                    
      Cane           1.27            1.27             1.28
      Beet           0.19            0.19             0.23
  Output (mln        10.30          10.25            10.68
    tonnes)                                     
   Cane sugar        9.15            9.10             9.30
   Beet sugar        1.15            1.15             1.43
  Imports (mln       3.20            3.20             3.20
    tonnes)                                     
 Ending Stocks       -1.62          -1.67            -1.47
  (mln tonnes)                                  
                                                                
 
     

    
 (Reporting by Dominique Patton; editing by Richard Pullin and
Christian Schmollinger)
  
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