WASHINGTON, D.C., U.S. — China’s market year 2015-16 soybean imports are forecast at 79 million tonnes, slightly higher than the previous year, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Services (FAS) reported on Dec. 1.

The high import forecast is based on lower domestic production together with growing demand for protein meal and vegetable oil. However, this is offset by relatively high carry-in stocks of soybeans. The U.S. soybean exports to China continue to be challenged by South American soybeans with total U.S. exports forecast at about 30 million tonnes in market year 2015-16. Market year 2014-15 soybean imports hit a record of 78.35 million tonnes with net growth of 8 million tonnes from the previous year due to growing demand for oilseed products and the low price of soybeans in the world market. The FAS October forecast for market year 2015-16 total domestic oilseed production is 3.26 million tonnes lower than the estimated 57 million tonnes in market year 2014-15. Discrepancies over actual domestic rapeseed production continue to be a challenge in calculating China’s oilseed balance sheets.

The forecast for China’s market year 2015-16 soybean production of 11 million tonnes remains unchanged. China National Grain and Oils Information Center (CNGOIC) maintained 11 million tonnes for market year 2015-16 domestic soybean production. Another industry source estimated market year 2015-16 soybean production at 11.2 million tonnes compared to the 11.7 million tonnes in the previous year. Industry sources indicate that due to a 3.2% area fall and 11% decline in yield, production for Heilongjiang Province was 3.57 million tonnes, down from the 4.16 million tonnes in the previous year.

China’s new corn support policy appears to have limited impact on soybeans. On Sept. 19, 2015, China’s State Grain Administration announced that the government would purchase 2015 corn (for state temporary reserves) at a price of RMB2,000 ($317) per tonne in the four Northeast provinces. This is RMB260 ($41) per tonne lower than the previous year. Industry insiders believe this price change is expected to reduce corn profits in market year 2015-16, thus impacting farmer’s planting intention for the next season.

As reported in July 2015, in several occasions, China’s Ministry of Agriculture (MOA) called for an adjustment of the crop mix by cutting 666,000 hectares of corn acreage in the Northeast provinces in 2016. However, the lack of details on how this crop adjustment proposal would be executed signals it will have a limited impact in boosting soybean planted area in 2016.

China’s feed mills are taking advantage of low foreign prices to increase imports of many corn substitutes including distiller's dried grains with solubles (DDGS), replacing expensive domestic grains. DDGS has also been used to substitute part of soybean meal in feed production. DDGS imports remained strong with total volume at 5.6 million tonnes in market year 2014-15.

On Dec. 15 China Ministry of Commerce authorities notified the U.S. that they are  considering an antidumping and countervailing duty investigation against distiller’s dried grains with or without solubles (DDGS originating from the U.S.).

When China announced anti-dumping investigation to U.S. DDGS at end of 2010, the China DDGS imports declined about 15% in 2011 due to potential imposition of punitive tariffs. The U.S. DDGS industry might suffer export declining in market year 2015-16 if the investigation progresses.