Domestic soybean industry in danger
- By Jiao Meng
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E-mail China.org.cn, May 8, 2012
As growers have replaced soybeans with corn, over 80 percent of soybean oil manufacturers have ceased operations, China Securities Journal reported. In northeast China's Heilongjiang Province, China's last major soybean production area, the soybean industrial chain was in jeopardy.
According to statistics from dadou.cn, farmers have reduced their total planted soybean crop area by 30 percent in Heilongjiang Province and 31 percent in Jilin Province since last year.
"No one wants soybean seeds, even for free," said salesman Shi Xiaojing of Harbin City, the capital city of Heilongjiang. "Moreover, no one is showing interest in soybean fertilizer. I only sold one ton out of over 700 tons of fertilizer."
Chief Editor of dadou.cn Liu Zhaofu expressed his worries about the soybean industry's ability to recover from the downturn.
"It is estimated that the planting is at record low. If the retail price cannot exceed 5 yuan (US$0.79) per kg, there is no doubt that the declining trend will not be reversed next year," Liu said.
Wang Xiaoyu, vice secretary-general of the Heilongjiang Soybean Association, said soybean oil firms are running under production capacity due to the soybean shortage. Only one million tons of soybeans remain for oil production in the province, except the state reserve and those soybeans retained for food processing. With Heilongjiang's 17.4 million ton processing capacity, current supplies are far from adequate.
As a result, the supply of soybean meal, a by-product of oil squeezing, cannot satisfy the demand of feed producing companies.
Wen Kuiliang general manager of Zhengda Co, a local feed factory, calculated that the extra cost to use out-of-province soybeans was about 300 yuan (US$ 47.7) a ton.
At present, many oil processing firms are supported by foreign investors and northeast China is the last "fortress" of local production remaining.
Wang Xiaoyu said the soybean industrial chain in northeast China is currently unsustainable. A failure to address the problem with strategic vision might cause the domestic soybean industry to collapse within a few years, he said.
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