Russian Agriculture Minister Dmitry Patrushev made a proposal to China to set up joint soy processing production capacity in Russia, as reported by Reuters on November 8. The minister met with China's Ministry of Agriculture on Thursday to discuss the possible joint soy processing effort. According to Patrushev, Chinese investment in joint production would greatly increase Russian soy supplies to the Chinese market. China is diversifying its soybean imports since it is currently in the process of cutting all soybean imports from the US, its largest soybean supplier.
In October, China’s Ministry of Finance announced the cancellation of tax rebates on soymeal after imposing a 25% tariff on soybean imports from the US, amid the ongoing trade dispute between the two countries. In recent months, China is seeking alternative feed ingredients for its livestock, as well as to boost domestic output of soybeans. Earlier this week, it was reported that Brazil’s soy processing sector is in talks with the Chinese government to find more ways to increase soymeal exports. Although Russia is a small supplier of soybean, it expanded production throughout the past decade. According to the US Department of Agriculture, Russian farmers are expected to reap a record 3.9m tons and sell 75m tons abroad in the 2018-19 season.