The global soybean market is expected to recover from its slowing demand in 2019. A report claimed that China is currently recovering from the adverse effects of the swine flu epidemic that caused the decline of global inventory levels for soybean. However, as it recovers, the commodity is expected to increase in global production by next year.
Global soybean production was expected to decline by 21.65 million metric tons or 6 percent down to 336.56 million tons in the years 2019 and 2020. The forecasted decline was said to be the commodity's lowest from 2016 through 2017.
However, the US Department of Agriculture claimed that in December of this year, the supply for soybean would recover and start to increase this month. The improvement was said to yield destocking measures thereby increasing global stocks of the commodity.
In particular, China's soybean demand is expected to increase by three percent every year for the next eight years. The report claimed that it would yield around 85 million metric tons for 2019, but said values were declining due to pork industry consolidation.
However, China, perceived to be the biggest soybean buyer in the world and accounting for over 64 percent of global soy trade, needs soybean products which are manufactured as hog feeds. As the market recovers from the swine flu epidemic, China would up its purchase of the good by next year.
It was also revealed that China is the world's largest pork producer and consumer. Thus, there would be a rise in Chinese imports forecasted to be at 85 to 87 million metric tons for 2020. The head of grain and oilseeds at S&P Global Platts Analytics Pete Meyer claimed that the Chinese pork industry consolidation promises lesser chances of the epidemic in the future. Therefore, he added, the lesser instances of outbreaks, its pork industry would recover from the negative publicity. Thus, China would continue to be the largest pig producer and increase the purchase of soy products to accommodate the increase in pig production in the coming years.
Pig farming companies in China also started to consolidate wherein the majority of the small and medium-sized farms have cleared their area of the swine flu virus. It was also reported that there would be no large-scale culling of pigs by 2020 and that the large pig farming companies have started to expand their herds. Moreover, it was also revealed that the Chinese Agro-consultancy firm JCI China announced that Beijing would be expecting about 80 percent of its pig production to recover by the year 2020 and would last until 2027 as a 'good investment' commodity.