As the global food crisis deepens, there is growing domestic and international concern about food security in China, the world’s most populous country and largest food importer. The Chinese government has pointed to its record grain harvests and massive grain reservation systems to reassure its public and international audiences that the country will not face imminent grain security risks. Currently, China has significant volumes of world grain reserves. According to the Nikkei Asia report, by mid-2022, China expected to 69% of the world’s corn (maize), 60% rice, 51% wheat and 37% soybeans. However, this was refuted by the country’s Foreign Ministry.
However, as an official representative of the government of the country The National Food and Strategic Reserves Administration noted in November 2021, the supply on the domestic grain market is “fully guaranteed”, and grain stocks are at “Historic high level”.
Given that China’s imports of rice and wheat make up only a smaller share of its total consumption, and with the world’s largest stocks of rice and wheat, China does not appear to have major problems in the near term with its staple food supply. However, the most significant risk to China’s food security lies in the supply of pigs. Questions about how to feed China’s herd of pigs remain a growing problem for Beijing and a threat to global food security.
Soy shortage in China
Along with China’s phenomenal economic growth since the “reform and opening up” era, food preferences, diets and lifestyles have also begun to change, leading to a rapid increase in demand for edible oils and meats. Since the early 1980s China’s huge appetite for pork led to the industrialization of pig farming and multi-billion dollar feed industry. Today feed sector in China includes 42 percent pig feed, 43 percent poultry feed and 9 percent fish feed. China’s huge appetite for feed is driven largely by its rapidly growing herd of pigs. How about 75 percent of animal feed is soybean meal.soybeans are critical.
While China is the world’s largest soybean importer today, this has not always been the case; actually used to be China major exporter. However, to qualify for World Trade Organization (WTO) membership, China has had to make significant compromises, including lowering common agricultural tariffs and supporting domestic agriculture. Meanwhile, Lester Brown’s 1994 article and 1995 book “Who Will Feed China?” sparked global concern about China’s ability to feed itself. Beijing then made a strategic decision stop growing soybeans and focus on self-sufficiency in the main grain to provide calories. As a result, the soybean import quota was removed and the tariff rate was reduced to 3 percent.
Since the mid-1990s, when the feed sector was booming and domestic production was declining, Soybean imports to China have increased significantly: from 1 million metric tons (Mt) in 1996 to 95 Mt in 2017. China is the world’s largest importer of soybeans, buying over 60 percent of all global exports. From 2000-01 to 2016-17, China’s imports were 88 percent growth in the world soybean trade. American and Brazilian soybean producers have two advantages over China in domestic soybean production: cheaper and genetically modified (GM) strains.
As imports grew, China cut domestic production. From 2008 to 2013 the area dedicated to soybean production decreased by 24 percent. In Heilongjiang province, the traditional center of Chinese production, the area used to grow soybeans has decreased by 42 percent. imported soybeans are genetically modified and are mainly processed to produce vegetable oil and flour used as animal feed. Locally produced soybeans are non-GMO and are mainly used for direct human consumption (for example, in tofu, soy milk and soy sauce). The consumption of soybean food products has increased, but the consumption of edible oils and soybean meal has increased. grew up faster and will continue to grow due to rising consumer incomes and changing food preferences.
The problem of growing feed corn in China
Over the past decades, as China moves to modernize its swine production by replacing backyard pig farming with modern and commercial large-scale pig farming, domestic demand for feed corn has grown rapidly. Compared to wheat, soybeans and rice, domestic corn shortages are even more of a concern for Chinese policy makers, at least in the near future. Over the past few years, corn imports to China have increased several times due to lack of production. In 2021, China had to import 28.35 million metric tons corn, up 152% from the previous record of 11.3 million tonnes in 2020. from USA, Argentina, Brazil and Ukraine.
While the decline in U.S. corn imports in recent years can be explained Sino-American trade war, China was looking for other suppliers of corn, importing a significant amount of corn from Ukraine. Since 2020 China is best trading partnerconsidering the country as important warehouse for BRI-related tradeagricultural exports are becoming increasingly important for China. Combined with potential labor shortages and rising gas and fertilizer prices, the Russian-Ukrainian war and subsequent supply disruptions to China will create significant inflationary pressures.
Due to uncertainty and ongoing tensions between China and USA as well as the Ukrainian-Russian conflict, further diversification of corn imports from Romania and other European countries remains an important alternative.
China’s Pig Risk Management Efforts
In recent years, the Chinese government has sought to increase domestic production of soybeans and corn. For example, in January 2022, the Ministry of Agriculture and Rural Affairs announced China’s new 14th Five-Year Crop Production Plan. At the same time, China will strive significantly increase domestic production of soybeans and corn to improve self-sufficiency in feed supplies grains. In particular, by the end of 2025, China wants to produce approximately 23 million tons of soybeans, up 40 percent from current production levels.
Over the past few years, rising trade tensions between China and the US have affected bilateral soybean trade. As part of food security, China has been looking for a replacement for soybean meal and other products made from soybeans. Since China’s dependence on American soybeans was seen as weak link during the trade war under the previous US administrationBeijing has sought to stimulate soybean production in other countries, especially in Russia. In 2018, soybean imports to China from Russia reached 0.8 million tons, an increase of 64% compared to 2017. Given Russia’s huge potential for soybean production, China has exported more agricultural labor to Russia and increase in investments in Russian soybeansWith. However, in 2021 Russia has introduced a 30 percent tariff for soybean exports in response to rising food prices.
While continuing to increase domestic soybean production, the Chinese government has announced plans to support greater use of technology for stabilization. yield and ensure supply. Although Beijing has long denied permission for the domestic cultivation of GM crops due to public opposition to GM foods, recent moves by the Chinese government suggest that permission for commercial planting of GM corn and soybeans will be granted soon. Standards for GM corn and soybean variety approval have been released at the beginning of June. This followed statements from China’s top politicians who called for progress in biotech breedingand also from Ministry of Agriculture and Rural Affairswhich suggests that China is preparing to allow greater use of GM technologies in agriculture, and Beijing is keen to support domestic biotechnology companies. For example, in December 2021, the Ministry of Agriculture and Rural Affairs announced plans to approve the safety more varieties of GM corn produced by domestic companies with subsequent approval two new varieties of GM corn for import in January 2022.
To reduce dependence on foreign coarse grains, China has also sought to directly import more pork and other meat products in recent years. For example, the country’s total imports of meat and fish almost doubled between 2017 and 2019, although this was also largely driven by a shortage of domestic pork. China imported a record 4.4 million tons of pork in 2020, more than 40 percent of world trade. China is also currently the largest importer of beef in the world. In 2020, the country imported 2.1 million tons of beef, 23 percent of the demand for beef and 30 percent of world trade. Even for fisheries, China, a country that has long been the largest exporter of fish, is importing more and more. In 2016 China imported 4 million tons of fish productsand in 2019 it jumped up to 6.3 million tons.
In addition, China is making efforts to reduce domestic consumption of pork. With great concern about the negative health impacts of the population’s high consumption of pork, the Chinese government is advising the public to eat more poultry and fish and less pork, which will also reduce the country’s dependence on imports. In 2018 with the help African swine fever outbreak, pork prices have risen significantly. In order to ensure the country’s meat supply, the Chinese government introduced a policy of increasing domestic poultry production, which led to a change in the country’s feed mix: a sharp reduction in pig feed and an increase in poultry feed. For example, in Shandong Province, China’s largest feed producer, pig feed fell 28% while poultry feed rose 8.6%. between January and April 2019 Since the feed conversion ratio is 2.7 to 5.0 for pigs and only 1.7 to 2.0 for chickens, this has reduced overall feed demand in China. no reduction in meat yield.
As China’s grain imports, especially corn and soybeans, have soared to unprecedented levels, the country’s vulnerability to trade tensions and supply disruptions has increased. While China is relatively less dependent on global food trade for staple food supplies, significant risks remain for coarse grains. To overcome these challenges, China has sought to increase domestic production of coarse grains through five-year plans, technological developments, reducing the country’s overall pork consumption, and further diversifying the countries China imports from, which is also shaping global food supply chains. However, if factors such as the Russian-Ukrainian war continue at their current pace, China, like the rest of the world, could soon face looming feed and meat crisis.