May 3, 2018 / 11:27 AM / 2 months ago

CORRECTED-China launches "emergency" campaign to boost soy output

(Corrects 6th par to say 2 million mu, not 200 million mu)

BEIJING, May 3 (Reuters) - China is taking extra efforts to increase its soybean output this year amid an ongoing trade spat with the United States that threatens to curb imports from its second supplier.

China is the world’s top buyer and consumer of soybeans, with most used to feed its huge livestock sector. But Beijing has threatened to levy a 25 percent tariff on soybean imports from the United States, in retaliation over trade measures taken by Washington.

The threat of the tariffs alone have already cut off U.S. soybean imports, and pushed up prices from other suppliers such as Brazil, supporting the price of soymeal, a widely used animal feed ingredient.

Authorities in the north-eastern Heilongjiang and Jilin provinces met last weekend to discuss actions to boost planting of soybeans, reports posted on city government websites said.

A document circulating online apparently published by the Heilongjiang provincial government called for an extra 5 million mu (333,333 hectares) to be planted with soybeans this year.

The so-called “emergency notice” also called for an additional 2 million mu to be included in an ongoing programme to rotate corn with other crops such as soybeans.

No-one answered the telephone at Heilongjiang provincial government offices to confirm the document. However, a notice on the website of Heihe city in Heilongjiang referred to provincial and national-level meetings to boost soybean planting.

It added the city held a meeting on Monday urging officials to fully implement the task of boosting soybean planting.

The government of Jilin provincial capital Changchun also outlined several actions to fulfil the new policy in a document posted online, dated April 28.

Those included sending officials “deep into the countryside” to supervise planting and make sure seed supply and machinery was sufficient, while also launching media campaigns to promote the “political task” of increasing soybean production.

No-one answered the telephone at Jilin government offices. The Ministry of Agriculture and Rural Affairs did not immediately respond to a fax.

The new plan is unlikely to offer much immediate relief for buyers of feed. An additional 5 million mu of soybeans would increase output by around 600,000 tonnes, estimated Yang Linqin, an analyst at COFCO Futures.

China is expected to import 96 million tonnes of soybeans in the 2017/18 year, according to official numbers, versus domestic production of 14.6 million tonnes.

But the official efforts to increase domestic production underline Beijing’s concerns about the impact of the tariffs.

“Domestic policy is [already in place] to reduce corn planting and increase soybean planting, but releasing this emergency notice is more aimed at the trade war,” said Yang.

“Compulsory” government action would be much more effective than relying on farmers’ own intentions, she added.

Farmers had previously signalled that they would plant more corn this year, potentially reversing a recent decline in production of the grain in favour of soybeans. (Reporting by Dominique Patton. Additional reporting by Beijing Newsroom; editing by David Evans)

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