Can African soybeans help ease China’s reliance on US to feed insatiable demand?

China has the world’s largest number of pigs – more than 450 million, as of April – producing about 50 million tonnes of pork each year. Soybeans are processed into a variety of food products, but they are also used to make swine feed.

The China National Grain and Oils Information Centre estimates that the country will import 97 million tonnes of soybeans in the 2023-24 marketing year.

Zambia, Tanzania, Benin and Ethiopia are some of the other African countries already exporting soybeans to China, but the Asian economic giant’s main sources of the superfood are the US, along with Brazil, Russia and Argentina.

The trade war which began during Donald Trump’s administration saw Washington and Beijing impose tit-for-tat tariffs on various products, including soybeans.

But relations have improved lately, after frequent exchanges between Chinese and US officials in recent months. Last month, China signed its first bulk orders since 2017 for American soybeans, corn, sorghum and wheat.

They were among 11 purchase agreements worth billions of dollars struck by Chinese commodity importers and top US merchants – including ADM, Bunge, and Cargill – at the US-China Sustainable Agricultural Trade Forum in Des Moines, Iowa.

Last week, China Grain Reserves Group ordered about 600,000 tonnes of US soybeans.

South Africa’s soybean shipment to China followed state-owned Chinese trader Cofco Group’s purchase in May of 53,000 tonnes of corn from the country, to be used to make animal feed.

South Africa, the continent’s largest corn producer, exported 108,104 tonnes of yellow feed corn to China between March 25 and 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 corn was bought by China, which is heavily dependent on the US and Ukraine for most of its imports of the crop.

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 most 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 stood at US$56.74 billion – about a fifth of China-Africa trade that year – with South African 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 processes, and increasing the number of zero-tariff products.

Agriculture has become the new focus of China’s engagement with Africa, with its list of food imports from there expanded to include avocados, pineapples, chillies, cashews, sesame seeds and spices.

Senior research fellow Mandira Bagwandeen at the University of Cape Town’s Nelson Mandela School of Public Governance pointed out that China has prioritised food security as one of the goals in its 14th five-year plan (2021-2025).

“Change in weather patterns has impacted local yields and harvests and the US-China trade war has also had an impact on grain supplies,” she said, adding that US grain exports, including soybeans, to China had decreased substantially.

“So, the Chinese government is aware that it needs to improve its industrial supply chain for grains as well as diversify global sources of grain to ensure its food security.”

Bagwandeen said Africa – especially countries like South Africa, Nigeria and Egypt with the largest grain sectors – was likely to become a major source of grains supplies for China.

Wandile Sihlobo, chief economist with the Agricultural Business Chamber of South Africa, said the recent soybean exports from various African countries was “encouraging and shows China’s intent to deepen trade”.

But he cautioned that shipments would remain “fairly small in the overall share of the volume that China imports from the world”.

China accounts for roughly 50 per cent of global soybean imports, and Africa would not be able to provide a notable share of supply in the foreseeable future, Sihlobo said.

Africa’s soybean production remains relatively low, with leading producer South Africa only accounting for around 2.7 million tonnes. A significant share – 2 million tonnes – was dedicated to domestic consumption, Sihlobo said.

Lauren Johnston, an ­associate professor at the University of Sydney’s China Studies Centre, said China’s plan was to diversify its sources of grain from the US.

The expansion of its purchases from Africa were also part of President Xi Jinping’s promises on the sidelines of the Brics summit in August about “boosting Africa’s exports to China and agricultural modernisation”.

“It might take time but Africa could become an important additional source of grains for China in the future,” Johnston said.

“This does, however, also raise questions around net impacts of new export opportunities, including managing any prospective deforestation or crop diversion impacts, and ensuring the latter don’t ultimately hurt the poorest by unaccounted for increased food prices.”

Despite these concerns, Johnston said increased imports would help African countries earn foreign exchange, thus raising incomes for farmers. “But quantities matter too in terms of the national revenue potential.”

Joan Cuka Kagwanja, head of the Land Policy Initiative – a joint programme between the African Union, United Nations Economic Commission for Africa, and the African Development Bank – said Africa had the potential to produce soybeans for Chinese and global markets.

Soybean demand in Africa was still relatively low, but rising rapidly for food, animal feed, biofuel and industrial uses, she said.

To be competitive, Africa must increase productivity “so this is an area for investment or partnership with China”.

“Africa is best off investing in the entire value chain for value addition, instead of exporting the raw product obviously, so investing in soybean value chain development is the way to go,” Kagwanja said.

“A partnership with China to boost domestic grain production, such as solar-powered irrigation to reduce risk associated with drought or climate change; increased adoption of high yielding crop varieties; investment in renewable energy and infrastructure can be beneficial,” she added.

“Value addition and diversification of the grains beyond the raw product needs to be Africa’s focus to gain value from the trade or partnership with China.”