Soybean output in China, the world’s largest consumer, will decline more than forecast to the smallest in 22 years as farmers switch to corn, Oil World said.
The estimate is 11.7 million metric tons, down about 4 percent from last year and 10 percent below the crop two years ago, the Hamburg-based research company said in a report. The previous forecast was 11.8 million tons. The 2013 estimate was raised to 12.2 million tons from 12 million tons.
Soybean planting fell 7 percent this year while the corn area expanded to a record, with farmers "claiming that with the reduced soybean prices they cannot make a profit," Oil World said. Soybeans on the Chicago Board of Trade dropped 22 percent this year compared with an 18 percent decline in corn prices.
"China’s import dependence on oilseeds and products will continue to rise in 2014-15 and beyond, particularly if the alarming trend of shrinking oilseed plantings is not reversed," Oil World said.
By planting corn on the same fields year after year, more fertilizers are required because of soil degradation, raising production costs and "making it more difficult for the government to reduce domestic corn prices without jeopardizing the extent of corn plantings and production," Oil World said.