This will result in China becoming a net importer of soybean meal for the first time in five years. As China’s livestock, dairy, poultry and aquaculture sectors experience strong growth (35% of total agricultural output), protein meal demand is mirroring this growth. Total protein meal demand is estimated to grow by 10 percent in 2005/06 from 40 to 44 MMT.

China’s larger soybean meal imports, although small relative to domestically produced soybean meal are likely driven by reduced imports of fishmeal due to world supply constraints. The lack of availability, particularly from Peru, along with large price increases led China to turn to alternative protein sources to satisfy the animal feed industry.

Additionally, India has ample supplies of relatively inexpensive soybean meal and has been able to supply China fairly quickly. With the unpredictability of fishmeal supplies along with escalating prices, India is likely to continue exporting soybean meal to China.