Minnesota Farmers Union

(January 8, 2010) - It would not be a stretch to assert that Chinese imports have driven the recent growth in soybean production and exports by the US, Brazil, and Argentina. Between 1995 and 2009, Chinese imports of soybeans grew by 1.459 billion bushels (from 0.029 to 1.488 billion) while the rest of the nations of world increased their imports by 0.183 billion bushels (from 1.168 to 1.351 billion).

China now imports 53 percent of all raw soybeans in world trade. While Brazil and Argentina have captured the lion's share of the import growth, any change in the rate of growth in Chinese soybean imports would have serious price and production-growth consequences for the US as well as Brazil and Argentina.

When it comes to decade-long growth rates the size of those recently experienced by Chinese soybean imports, it is always dangerous to extrapolate such rates years and decades into the future. In this case, it is likely even more dangerous to make continued high-growth assumptions because, well, because it is China we are talking about.

China's imports of soybeans stand in contrast to its behavior in virtually all other major agricultural commodity markets. In the case of grains, China exports more than it imports, shipping between 1 and 2 percent of its major-grain crops out of port in 2009.