The USDA’s Foreign Agricultural Service just dropped its 2025 Oilseeds and Products Annual Report for China, diving deep into the nation’s oilseed scene—everything from production and consumption to trade and policy shifts. Released on March 19, 2025, it unpacks trends and projections for the 2025/26 Marketing Year, shedding light on how China’s navigating its agricultural challenges amid a tricky economy, changing tastes, and shifting trade winds. Here’s the full breakdown of what the report reveals.
Soybean Production and Consumption: A Slight Decline Amid Policy Support
The USDA FAS forecasts China’s soybean production for MY 25/26 at 19.8 million metric tons (MMT), a marginal decrease from the 20.65 MMT estimated for MY 24/25. This decline is attributed to falling domestic soybean prices and reduced profitability for farmers, despite government efforts to bolster production through subsidies. The planted area is expected to shrink slightly to 9.9 million hectares (Mha), down from 10.32 Mha in MY 24/25, reflecting farmers’ hesitancy amid steep price drops—down nearly 30% over the past two years, with October 2024 to February 2025 prices averaging 4,007 yuan ($564) per metric ton.
| Metric | MY 24/25 Estimate | MY 25/26 Forecast | Notes |
|---|---|---|---|
| Production (MMT) | 20.65 | 19.8 | Slight decline due to falling domestic prices and reduced profitability. |
| Planted Area (Mha) | 10.32 | 9.9 | Decrease reflects farmer hesitancy despite government subsidies. |
| Imports (MMT) | 104 | 106 | Modest increase; record high of 112.2 MMT in MY 23/24. |
| Total Consumption (MMT) | 122 | 124.4 | Driven by growth in poultry, aquaculture, and modest swine feed recovery. |
| Crush (MMT) | 99 | 101 | Increase reflects higher demand for soybean meal and oil. |
| Food Use (MMT) | 17.2 | 17.5 | Steady growth despite declining population. |
| Feed Use (MMT) | 5.8 | 5.9 | Includes extruded full-fat soybean for livestock. |
| Ending Stocks (MMT) | 46.1 | 47.4 | Primarily composed of imported soybeans in state reserves. |
Food Security and Government Policy
China’s government has prioritized food security, aiming to achieve 23 MMT of soybean production by 2025 as part of its 14th Five-Year Plan. To this end, it has implemented significant subsidies, particularly in key regions like Heilongjiang, which accounts for 45% of national production. In 2024, Heilongjiang soybean farmers received subsidies averaging 5,250 yuan per hectare, compared to just 300 yuan for corn, highlighting the government’s push to incentivize soybean planting over more profitable crops like corn. Despite these efforts, the report suggests that current policies may not fully offset farmers’ economic concerns, as domestic soybeans remain uncompetitive against imports in the crush market.
Soybean Consumption
Soybean consumption for MY 25/26 is projected at 124.4 MMT, a slight increase from 122 MMT in MY 24/25, driven by growth in poultry and aquaculture sectors and a modest recovery in swine feed demand. However, the report notes a slowdown in soybean meal demand growth, reflecting a shift in consumer preferences away from pork toward more feed-efficient proteins and government efforts to reduce soybean meal use in feed formulations.
Imports and Trade: Navigating Tariffs and Geopolitical Tensions
China remains heavily reliant on soybean imports, with MY 25/26 imports forecast at 106 MMT, up 2% from 104 MMT in MY 24/25. This increase follows a record high of 112.2 MMT in MY 23/24, driven partly by state-directed purchases for national reserves. However, recent trade disruptions, including retaliatory tariffs on U.S. soybeans (10% additional tariff starting March 10, 2025) and Canadian canola products (100% tariffs on meal and oil), have introduced uncertainty. The report assumes these tariffs will persist through MY 25/26, potentially eroding U.S. market share further as Brazil continues to dominate with a price advantage.
Restrictions and Importer Suspensions
Sanitary and phytosanitary (SPS) restrictions have also impacted trade, with suspensions of several U.S. and Brazilian soybean shippers in early 2025 citing issues like quarantine weed seeds. These measures, alongside administrative delays in import permits, reflect China’s strategy to slow imports during domestic harvest periods to support local prices. Despite these challenges, South American exports, bolstered by record production, are expected to sustain China’s import needs, though diversification efforts continue with smaller suppliers like South Africa and Russia.
Other Oilseeds: Rapeseed, Peanuts, and Cottonseed
The report also examines other oilseeds, projecting a slight increase in rapeseed production to 15.9 MMT in MY 25/26, supported by expanded planted area (7.5 Mha) and favorable weather conditions for winter rapeseed. However, discrepancies between official estimates and industry sources suggest actual production may be lower. Rapeseed imports are expected to rise modestly to 4.1 MMT, despite uncertainties from China’s anti-dumping investigation into Canadian imports and new tariffs on canola products.
| Oilseed | Metric | MY 24/25 Estimate | MY 25/26 Forecast | Notes |
|---|---|---|---|---|
| Rapeseed | Production (MMT) | 15.6 | 15.9 | Slight increase due to expanded area and favorable weather. |
| Imports (MMT) | 4.0 | 4.1 | Impacted by tariffs on Canadian canola and SPS restrictions. | |
| Peanuts | Production (MMT) | 18.4 | 18.8 | Stable growth driven by profitability and subsidies. |
| Cottonseed | Production (MMT) | 11.08 | 10.5 | Growth supported by profitability in specific regions. |
Peanut production is forecast at 18.8 MMT in MY 25/26, reflecting stable growth driven by profitability and government subsidies. Henan and Shandong remain key producing regions, with peanuts increasingly favored over crops like cotton and corn. Cottonseed production is also expected to grow, supported by its profitability in specific regions, though exact figures for smaller oilseeds like sunflowerseed remain elusive due to limited reliable data.
Vegetable Oils: Production and Consumption Trends
Vegetable oil production for MY 25/26 is projected at 31.9 MMT, a 6% increase from 30.1 MMT in MY 24/25, driven by higher soybean and rapeseed crush volumes and expectations of economic recovery. Soybean oil dominates at 60.2% of total production, followed by rapeseed oil (24.1%) and peanut oil (10.6%). Specialty oils like camellia and sesame are growing but at a slower pace than government targets.
Consumption of vegetable oils is expected to reach 36 MMT in MY 25/26, up 1.7% from the prior year, though per capita consumption (around 28 kg annually) may be nearing a peak due to dietary shifts and slower GDP growth. Palm oil imports are forecast to decline to 4.9 MMT from 5.8 MMT. Reflecting increased domestic production and policy changes like the elimination of export tax rebates for used cooking oil. Which may reduce palm oil blending in exports.
Policy and Market Interventions
China’s government continues to play a significant role in the oilseeds market, balancing self-sufficiency goals with economic realities. The 2025 No. 1 Document reaffirms food security as a priority, emphasizing subsidies, farmland protection, and biotechnology adoption. The commercialization of genetically engineered (GE) soybeans and corn has accelerated, with GE crop acreage reaching 10 million mu (1.67 Mha) in 2024. Though resistance to GE soybeans persists in regions like Heilongjiang due to cultural preferences for non-GE products.
State-managed reserves, operated by entities like Sinograin and COFCO, are used to stabilize prices by absorbing surplus domestic soybeans and releasing stocks during high-demand periods. For instance, auctions of reserve soybeans were rumored in February 2025 to address price spikes, though exact reserve volumes remain undisclosed.
Challenges and Outlook
China’s oilseeds sector faces multiple challenges, including economic headwinds, declining population growth, and geopolitical trade tensions. The shift in consumer demand toward poultry and aquaculture offers opportunities for more efficient feed use but pressures soybean meal demand growth. Meanwhile, domestic production struggles with uncompetitive pricing against imports, despite government support.
Looking ahead, the USDA FAS anticipates a cautious recovery in MY 25/26, with soybean imports and crush volumes ticking upward, supported by South American supplies and modest economic growth. However, trade policies, tariff uncertainties, and the pace of policy-driven shifts in consumption patterns will continue to shape the market. For stakeholders in the global oilseeds trade, China remains a critical yet complex player, navigating the delicate balance between self-reliance and global integration.
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