The Influence of COVID-19 Epidemic on American Soybean Export

The COVID-19 outbreak in early 2020 affected all aspects of the national economy. As the epidemic continued to ferment around the world, on March 16, Germany announced the closure of its border, and many countries followed suit to protect themselves. Although it is only short-term and not universal, it is enough to hinder international trade channels and break the global economic ties, and it is naturally difficult for the international trade market of agricultural products to be immune. As the largest soybean importer in the world, the international soybean trade situation in China presents a complex trend, and the supply security of soybeans is facing a severe test. At present, major domestic oil plants are facing a serious shortage of soybean stocks, and the operating rate is the lowest in the same period in four years.

At present, China is the world's major soybean consumer and the largest soybean importer. In fact, in the history of international trade, China was once a net exporter of soybeans. However, since 1995, China has changed from a net exporter of soybeans to a net importer, and its imports in that year reached more than 300,000 tons (excluding soybean meal and soybean oil, by-products of soybeans). Since then, China's soybean imports have grown by leaps and bounds, reaching13.24 million tons in 2000. 200 1 After China's entry into WTO, the international trade market of agricultural products was further opened, and the import tariff of soybeans was greatly reduced, which made a group of world agricultural powers with technical and scale advantages or both begin to target the China market. Under the effect of comparative advantage, the soybeans produced by the world's agricultural powers can be described as "good quality and low price", so they can quickly occupy the domestic soybean market share. In 200 1 year, the total soybean import reached a small peak of13.94 million tons, and the proportion of imported soybeans in domestic oil processing raw materials rose to more than 70%. In 20 19, the total soybean import of China reached 8850 1. 1 10,000 tons, accounting for 83% of the domestic soybean supply market.

Squeezing oil and providing soybean meal feed are the main production directions of imported soybeans in China. The soaring demand for soybeans in China is directly related to the rapid development of the national economy since the reform and opening up. With the continuous improvement of residents' living standards, meat, poultry, eggs and milk have gradually become popular consumer goods, which is bound to promote the surge in demand for relatively low-priced soybean oil and soybean meal for aquaculture. Soybean oil with price advantage occupies nearly half of China's edible oil market, which is hard to match in the short term. At the same time, due to the high protein content of soybean, compared with other animal and plant oil meal feed products such as cottonseed meal, peanut meal, rapeseed meal, etc., although it has an absolute advantage in yield, soybean meal, as the main raw material of livestock and poultry feed, is still "scarce" and extremely scarce under the realistic constraint that meat, poultry, eggs and milk have become mass consumer goods. In addition, pastry food production, health food, cosmetics, antibiotics, etc. are also waiting for soybean meal to come to the rescue, and pet food, aquaculture, etc. also need soybean meal as raw material, and other products are difficult to replace. Low-priced soybean oil and widely used soybean meal make the domestic soybean market show demand rigidity.

Due to the low soybean production, China, with a large population and a small population, temporarily does not have the ability of high self-sufficiency in soybeans. Taking 20 17 as an example, the total soybean import is 95.54 million tons. If planted locally, it needs 770 million mu of cultivated land. China's soybean supply is heavily dependent on trade imports, among which Brazil, the United States and Argentina are the most important. In 20 19, the proportion of imported soybeans in Brazil, the United States and Argentina reached 65%, 19% and 10% respectively. With the spread of the epidemic, countries all over the world have adopted a series of policies and measures to restrict the export of agricultural products, such as "closing the city", "locking the country" and "restricting transportation". Among them, including Russia, Belarus, Kazakhstan and other countries 1 1 suspended soybean exports to China until June, and most agricultural enterprises at home and abroad were forced to "stop production" and "limit production". The sudden outbreak of "Black Swan" led to the "supply cut-off" of the fragile soybean industry chain, and the disadvantages of China's excessive external dependence were exposed. In March, 2020, China's soybean import trade fell into a serious crisis, and the amount of soybeans landed was only 4.27 million tons, a decrease of 14% compared with the same period of last year, the lowest level since February, 20 15. The decrease in the number of soybeans landed triggered a surge in soybean trading prices in China.

Look at Brazil first. Since 20 17, due to the escalating trade friction between China and the United States, China shifted the focus of soybean import from the United States to Brazil. According to the data released by the customs, in 20 17, China purchased 50.93 million tons of soybeans from Brazil, accounting for 53.3% of the total purchase, surpassing the 32.9 million tons of soybeans purchased from the United States, accounting for 34.4% of the total purchase. In 20 18, the proportion was as high as 75.04%, and Brazil replaced the United States as the largest soybean importer in China. However, according to the latest data released by the Brazilian Ministry of Health on the evening of May 27th, the number of confirmed cases in COVID-19, Brazil has exceeded 4 1 10,000, ranking second in the world after the United States. To make matters worse, the death toll in COVID-19, Brazil has remained high recently, especially in the last two days, exceeding 1 1,000 cases. Now, China has gradually stepped out of the horrible haze of the COVID-19 epidemic, but Brazil has fallen into the new "hardest hit" of the global COVID-19 epidemic. Especially in May, at least three private docks in Santos Port, the largest port in Latin America, which handles 80% of Brazil's agricultural products, found confirmed cases of the epidemic, which forced them to start emergency plans and trigger restrictions in other parts of Brazil. It's the season for South American soybeans to go on the market again, but looking at Brazil's soybean export market, everything is full of uncertainty.

Look at America again. According to the real-time epidemic surveillance system of Johns Hopkins University in the United States, there were 1 804206 cases of COVID-19 infection in the United States as of June1day. The number of COVID-19 infections and deaths in the United States is far ahead in the world. With the acceleration of the government's full resumption of work and production, and the surge of large-scale demonstrations in the United States, the epidemic in the United States is likely to recur. Earlier, Washington post reported that employees of several large meat processing enterprises in the United States were diagnosed with infection. Next, it is not impossible for the American epidemic to continue to spread to the agricultural States in the midwest. Now is the sowing date of American soybeans. Although it is reported that soybean planting in the United States is not obviously affected by the epidemic and the area has increased, experts estimate that the epidemic will last for about half a year, which means that the epidemic will be completely eliminated in the fall of 2020. If it lasts for such a long time, sleeping deeply will definitely affect the price of soybeans. On April 2 1 day, affected by the epidemic, Trump announced that he would suspend immigration for 60 days, resulting in a large number of temporary migrant workers missing. In addition, the number of confirmed cases in the United States is huge. Although the planting and harvesting of soybeans in the United States is highly mechanized, the sudden reduction of labor force will still have an impact on it.

Third, look at Argentina. As the world's largest exporter of soybean meal, the epidemic situation in Argentina is not optimistic. On March 3 1, compulsory isolation measures were fully implemented throughout Argentina: all shops except supermarkets and pharmacies were closed; Except for special industries, all enterprises will work from home. Strict prevention and control measures will undoubtedly bring great harm to Argentina's economic development, and agricultural products are no exception. At present, Argentina is in the busy harvest season of soybeans and corn. However, due to the tension caused by the COVID-19 epidemic, Argentina is facing the dilemma of logistics delay and manpower shortage, which leads many growers to choose to hoard newly harvested soybeans and corn and not sell them for the time being. According to foreign news on March 19, one of the three granaries in the world, an important port in the northern part of Rosario, the center of Argentine pampas Prairie, also announced the suspension of port activities due to the COVID-19 epidemic. As an important grain export hub in Argentina, the three major ports near Rosario are responsible for handling nearly 80% of the country's primary products and agricultural products exports, and the main products are soybeans, soybean oil and soybean meal. In 20 19, about 80% of Argentine soybean exports were exported to China. The drastic measures taken by Argentine countries and ports to ban soybean meal have obvious boosting effect, which will directly affect the turbulence of soybean meal market in China.

Through the above situation, it is not difficult to see that under the COVID-19 epidemic, the international trade situation of soybeans has changed in the following three aspects, thus affecting the supply security of soybeans in China.

First, the prevention and control of the epidemic situation led to the interruption of logistics and the obstruction of soybean trade and transportation.

On the one hand, due to the differences of epidemic prevention and control effects in different places, the logistics channel from the place of origin to the port has been affected to varying degrees. At present, the epidemic situation in China's three major soybean importing countries is not optimistic. The total number of infected cases and new cases is high, which inevitably involves logistics and dock workers, resulting in domestic labor shortage and logistics delay. On the other hand, although China's domestic epidemic prevention and control work has achieved initial results, the main soybean export ports are deeply affected by the epidemic, and the logistics channel from the port to the sales area still faces many obstacles. Large foreign trade ports, such as Santos port in Brazil and three ports near Rosario in Argentina, each bear a very high share of domestic agricultural products transportation. However, in order to cooperate with the smooth development of epidemic prevention and control work, its normal logistics and transportation work was forced to be suspended or restricted.

Second, the risk of agricultural products export embargo has increased, and the soybean international trade market has fluctuated greatly.

Due to the special importance and strategic position of agricultural products, with the continuous spread of COVID-19 epidemic in the world, some countries have unsafe expectations for bulk agricultural products, and the global agricultural products trade market is inevitably unstable. In addition, at the beginning of the year, African countries and India faced the locust plague, and countries tightened their supply chains for self-protection, and international agricultural products export embargo measures were strengthened and prices were raised. According to the relevant data of the Ministry of Agriculture and Rural Affairs, the transaction price in China soybean market in March was 286 yuan per 100 Jin, a record high since May 2065438+2008. At the same time, soybean producers are less willing to sell soybeans abroad for risk avoidance.

Third, international speculative capital took the opportunity to speculate, worsening expectations and creating market conditions.

Not long ago, Bloomberg reported that many countries were competing to implement grain export bans. The 500-word press release has caused abnormal fluctuations in the global grain market for more than a few days, causing people's panic. Although it is only a short-term phenomenon, it is a lesson for the future. The global food crisis in 2008 is a profound lesson from the malicious speculation of international speculative capital. Compared with 2008, the risk of food crisis caused by the epidemic situation is just different, and the hidden dangers are equally unimaginable. At any time, we must not relax our vigilance against the deliberate speculation of international speculative capital on the grain market.

Soybean meal and soybean oil have become just-needed commodities in China's farmers' market, and this pattern will not change fundamentally for a long time to come, and will even show a trend of continuing to strengthen. At the same time, the negative impact of the COVID-19 epidemic on a global scale is expected to last for a long time. For how to effectively ensure the stable and sustainable development of China's soybean market supply and improve the ability to resist natural, political, economic and other uncertain risks, the author believes that comprehensive measures should be taken from the following aspects.

First, increase epidemic assistance to recent soybean importing countries such as Brazil, and strive to maintain the stability of soybean supply chain.

South China is the main source of soybeans imported by the United States, and Brazil is the largest soybean importer in China. At present, it is the key season for soybean harvest and transportation in Brazil. Therefore, the urgent task to ensure the security of soybean supply is to increase support for epidemic prevention and control in Brazil and other countries, use China's experience in fighting the epidemic to help Brazil alleviate the plague of the epidemic, restore or open up diversified logistics channels as soon as possible, and ensure the smooth transportation and export channels of soybeans. At the same time, make a good supply interruption plan as soon as possible to deal with emergencies in all aspects of soybean supply chain. Furthermore, we should seize the opportunity of Palana melon, the second largest port in Brazil, to resume normal operation, increase the quantity, speed up the pace, import more and store more.

Two, government departments timely release authoritative information, actively and correctly guide the market.

The epidemic in COVID-19 lasted for a long time and affected a large area, which caused great psychological pressure on people. On the Internet, remarks such as "The world is about to fall into a food crisis, which China cannot avoid" have further aggravated the tense atmosphere, causing many people to fall into the panic of hoarding food. At the critical moment, the appealed government departments should give full play to their forward-looking and leading roles and release accurate information in time, which is not only conducive to preventing and controlling risks in advance, but also conducive to stabilizing market trends. For example, on April 4th, the State Council's joint prevention and control mechanism held a press conference in Beijing, which gave detailed answers to the domestic food supply situation one by one, stabilized the people's hearts and the market, and achieved good results.

Third, increase investment in scientific research, increase domestic soybean production and increase soybean self-sufficiency rate.

In view of the low yield and high price of local soybeans in China, it is necessary to adhere to the soybean revitalization plan proposed by the Central Committee in document No.2019, promote joint research on major soybean research projects, and accelerate the cultivation of new soybean varieties with high yield, high oil, high protein, density tolerance, multi-resistance and suitable for mechanical harvesting. Improve the traditional decentralized planting mode and improve the scale and mechanization level of soybean planting. Efforts should be made to improve the quality and quantity of soybeans on limited arable land and reduce the dependence of soybean supply on the international market.