BEIJING, CHINA — Declining sow and hog inventories due to the African swine fever outbreak has led to lower feed demand and smaller soybean imports in 2018-19 and 2019-20 in China, according to a July 5 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).

However, increased government subsidies have led to increased soybean production in 2019-20, which is forecast at 16.8 million tonnes, up 5.7% compared to the previous year, the USDA said.

“This is based on increased government subsidies, acreage expansion, and slightly higher expected yield,” the USDA said.

The USDA said 2019-20 area is revised upward to 8.85 million hectares, up 5.4% from 2018-19. Growth in soybean area is largely attributed to subsidy increases for soybeans and decreases for corn.

The USDA noted that promotion of intercropping and crop rotation (soybeans and corn), along with enhanced technical extension, are expected to moderately facilitate soybean expansion and yield. The agency said the government’s Soybean Revitalization Plan targets soybean areas of 9.33 million hectares and 10 million hectares by 2020 and 2022, respectively.

Reduced feed demand in 2019-20 is expected to directly translate into lower soybean meal use for feed. Soybean meal use for feed is estimated at 65.7 million tonnes in 2018-19, a decline of 3.3 million tonnes from the previous year. The USDA projects soybean meal feed use to decline further in 2019-20 to 63.6 million tonnes.

China, which has placed 25% tariffs on soybeans imported from the United States as a result of the trade war between the two countries, is forecast to import 83 million tonnes in 2019-20, down from an estimated 84 million tonnes in 2018-19, and significantly lower than the 2017-18 total of 94.1 million tonnes.

China’s rapeseed imports from Canada, its main supplier, are expected to fall to about 4 million tonnes, down from 4.7 million in 2018-19. The USDA noted that in March 2019, China banned shipments from two large Canadian rapeseed exporters. Since then, Chinese importers reportedly have stopped signing new contracts for Canadian canola products.

Meanwhile, China’s imports of sunflower seed meal, mainly from Ukraine, are expected to surge in 2018-19 to 850,000 tonnes, the USDA said. The 2019-20 estimate remains at 900,000 tonnes. Both figures are significant increases over the 2017-18 import figure.