Chinese feed rationing programme has been under market purview, ever since China got into trade war with United States in 2018. China pledged to slash its soybean consumption in feed so as to cut its reliance on US imports for the same. Many in the market believe that this programme is short lived as it is difficult to achieve that kind of efficiency with any other product. Recent news of recovery of hog herd from swine flu has made markets pundits claim that Chinese soybean imports will again increase, probably not from US but from Brazil. However, our analysis tells us a different story.

Chart shows Chinese consumption growth of pork and soybean usage in feed over the decade. When swine meat consumption has grown at 17% in the year 2021, growth in usage of soybean for feed has remained stagnant at mere 7%. Supporting this, a closer look on soybean imports tells that they have also increased only by a small 2.02% y-o-y.

This data only suggests intensification of the feed rationing programme by the China and who knows when this  growth in soybean import becomes negative as against the expectations of the market.