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China to buy $1.8 billion of US soybeans

By Paul Welitzkin in New York | China Daily USA | Updated: 2016-09-02 12:13

Customers in China have agreed to buy nearly $1.8 billion worth of soybeans from the US, totaling 146 million bushels.

The US Soybean Export Council (USSEC) made the announcement this week, and said the commitment was made at the organization's Global Trade Exchange in Indianapolis.

"China has a preference for US soybeans because of its consistency and quality," said Xiaoping Zhang, China country director for the council in an interview Thursday. "China first started importing soybeans from the US in 1995 with 140,000 metric tons. By 2015 US soybean exports to China totaled about 30 million metric tons."

Illinois, Iowa and Minnesota are among the top soybean producing US states.

China was a net exporter of soybeans until it began importing large volumes of soybeans and products in the mid-1990s, said Fred Gale, an agricultural economist at the US Department of Agriculture (USDA).

China to buy $1.8 billion of US soybeans

"Now soybeans sold to China are the largest US agricultural export as their value rose from about $400,000 annually during 1996-97 to as high as $14.5 billion in 2014. Last year the value fell to $10.5 billion due to declining prices and China's shift toward exports from Brazil," Gale said. Other countries that supply soybeans and soy products to China include Argentina and Canada, said Zhang.

Soybeans originated in Southeast Asia and were first domesticated by Chinese farmers around 1100 BC. "China produces about 12 million metric tons of soybeans," noted Zhang.

China's soybean production has been stagnant or declining at about 12 million metric tons, Gale said. "Chinese farmers prefer to grow more profitable crops like corn and rice," he added.

China's domestic soybeans are used mainly for two purposes, according to Gale. "Non-GMO (genetically modified organism) soybean oil and food products like tofu and soybean milk. Imported soybeans supply most of China's cooking oil and the protein in animal feed. Most of China's imported soybeans are genetically modified while China does not allow GMO soybeans to be produced domestically," he said.

Last year, US soybean farmers exported a record 62.88 million metric tons of soy and soy products, valued at $27.7 billion, a record high, according to the USSEC. Economists are predicting even more for 2016.

paulwelitzkin@chinadailyusa.com

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