China’s slow ramp up of U.S. soybean imports this year underscores how Beijing has gradually increased its domestic production, thanks to policy support. “The course of improvement in food self-sufficiency mirrors the efforts in China’s energy and chips security,” Goldman Sachs analysts said in a Dec. 9 report about China agriculture stock plays. Beijing’s top policy documents, especially in recent years, have highlighted the need to support domestic agriculture. Soybeans are particularly important as a key ingredient in livestock feed. Thanks to sweeping improvements in arable land and management of animal feed demand, the Goldman analysts expect China can drastically reduce its need for imported soybeans. In particular, they predict China’s corn and soybean yield can jump to 80% to 85% that of the U.S. by 2035, up from around 50% currently, while reducing soybean content in animal feed by 25%. It’s a big shift, considering that China is the world’s largest soybean importer and has been the largest buyer of U.S. soybeans — until pausing those purchases for much of this year as trade tensions escalated. After both sides reached a trade truce in October, China has resumed buying U.S. soybeans, but so far at a smaller volume than initially expected . China has “stabilized its reliance on [grain] imports for the first time in two decades,” the Goldman analysts said …
