New trade with China – the world’s largest consumer and importer of soybeans – would help generate foreign earnings for South African farmers, especially in the agricultural economy, he said.
China has the largest number of pigs in the world – more than 450 million, as of April – producing about 50 million tons of pork each year. Soybeans are processed into a variety of food products, but are also used to make pig feed.
China urged to diversify soybean sources to reduce dependence on the US
China urged to diversify soybean sources to reduce dependence on the US
China’s National Grains and Oils Information Center estimates the country will import 97 million tonnes of soybeans in the 2023-24 marketing season.
Zambia, Tanzania, Benin and Ethiopia are some of the other African countries already exporting soybeans to China, but the main sources of the Asian economic giant’s superfood are the US, along with Brazil, Russia and Argentina.
The trade war that began during the administration of Donald Trump has seen Washington and Beijing impose tariffs on various products, including soybeans.
However, relations have improved recently, following frequent exchanges between Chinese and US officials in recent months. Last month, China signed its first bulk orders since 2017 for US soybeans, corn, sorghum and wheat.
It was among 11 billion-dollar purchase deals struck by Chinese commodity importers and leading U.S. traders — including ADM, Bunge and Cargill — at the U.S.-China Sustainable Agricultural Trade Forum in Des Moines, Iowa.
Last week, China Grain Reserves Group ordered about 600,000 tonnes of US soybeans, according to Reuters.
South Africa’s soybean shipment to China followed Chinese state trader Cofco Group’s May purchase of 53,000 tonnes of maize from the country, which will be used to produce animal feed.
South Africa, the continent’s biggest maize producer, exported 108,104 tonnes of yellow feed maize to China from March 25 to April 14 this year, according to the South African Grain Information Service.
In the first week of October, another 55,960 tonnes of South African yellow maize was bought by China, which is heavily dependent on the US and Ukraine for most of its imports of the crop.
Why food is the new focus for China’s ties with Africa
Why food is the new focus for China’s ties with Africa
South Africa is China’s top trading partner on the continent, with minerals such as gold, diamonds and iron, manganese and chromium ores making up the bulk of its exports. The country is also a major exporter to China of citrus fruits, grapes, apples and pears.
Two-way trade between South Africa and China in 2022 amounted to US$56.74 billion – about a fifth of China-Africa trade that year – with South Africa’s exports to the Chinese market accounting for US$32.54 billion .
China has pledged to address its trade imbalance with Africa by opening green lanes for agricultural exports from the continent, speeding up inspection and quarantine procedures and increasing the number of zero-tariff products.
Agriculture has become the new focus of China’s engagement with Africa, with the list of food imports from there expanding to include avocados, pineapples, chilies, cashews, sesame seeds and spices.
Why China’s focus on African food imports won’t cloud infrastructure prospects
Why China’s focus on African food imports won’t cloud infrastructure prospects
Senior Research Fellow Mandira Bagwandeen at the University of Cape Town’s Nelson Mandela School of Public Administration pointed out that China has prioritized food security as one of the goals of its 14th five-year plan (2021-2025).
“The change in weather patterns has affected local yields and harvests, and the US-China trade war has also had an impact on grain supplies,” he said, adding that US grain exports, including soybeans, to China had fallen significantly.
“Thus, the Chinese government knows it needs to improve its industrial grain supply chain as well as diversify global grain sources to ensure its food security.”
Bagwandeen said Africa – especially countries such as South Africa, Nigeria and Egypt with the largest grain sectors – is likely to become an important source of grain supplies for China.
5 Big Concerns About China’s Food Security
5 Big Concerns About China’s Food Security
Wandile Sihlobo, chief economist at the Agricultural Business Chamber of South Africa, said recent soybean exports from various African countries were “encouraging and show China’s intention to deepen trade”.
However, he warned that the shipments would remain “quite small in the overall share of the volume that China imports from the world”.
China accounts for about 50 percent of global soybean imports, and Africa will not be able to provide an appreciable share of supply in the foreseeable future, Sihlobo said.
Africa’s soybean production remains relatively low, with top producer South Africa accounting for only about 2.7 million tonnes. A significant share – 2 million tonnes – was devoted to domestic consumption, Sihlobo said.
‘Golden era’: Chinese president hails strategic ties with South Africa
‘Golden era’: Chinese president hails strategic ties with South Africa
Lauren Johnston, an associate professor at the University of Sydney’s Center for China Studies, said China’s plan was to diversify its sources of grain from the US.
Expanding its markets from Africa was also part of President Xi Jinping’s promises on the sidelines of the Brics summit in August to “boost Africa’s exports to China and agricultural modernisation”.
“It may take time, but Africa could become an important additional source of grain for China in the future,” Johnston said.
“This, however, also raises questions about the net impacts of the new export opportunities, including managing any potential impacts of deforestation or crop diversion, and ensuring that the latter do not ultimately hurt the poorest through unreasonably increased food prices.”
Xi Jinping pledges more aid to Africa in the industrial and agricultural sectors
Xi Jinping pledges more aid to Africa in the industrial and agricultural sectors
Despite these concerns, Johnston said increased imports would help African countries earn foreign exchange, thereby increasing incomes for farmers. “But quantities also matter in terms of national revenue potential.”
Joan Cuka Kagwanja, head of the Land Policy Initiative – a joint program between the African Union, the United Nations Economic Commission for Africa and the African Development Bank – said Africa has the potential to produce soybeans for the Chinese and global markets .
Soybean demand in Africa was still relatively low, but growing rapidly for food, feed, biofuel and industrial uses, he said.
To be competitive, Africa needs to increase productivity “so this is an area for investment or partnership with China”.
How Brics expansion could help boost China’s influence in Africa
How Brics expansion could help boost China’s influence in Africa
“Africa is better off investing in the whole value chain for value addition, rather than exporting the raw product obviously, so investing in the development of the soybean value chain is the way to go,” Kagwanja said.
“A partnership with China to boost domestic grain production, such as solar irrigation to reduce the risk associated with drought or climate change. increased adoption of high-yielding crop varieties; investment in renewable energy and infrastructure can be beneficial,” he added.
“Adding value and diversifying grains beyond the raw product must be the focus for Africa to gain value from trade or cooperation with China.”