In the midst of a trade war with the United States, China is developing a dedicated soybean supply chain with Brazil that is specifically tailored to China’s sustainability and quality standards.
The “Soy China” initiative is a customized, exclusive soybean production model to meet Chinese import needs and standards, particularly regarding environmental, social and traceability criteria, according to a report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. The model is inspired by the idea of “Boi China,” in which Brazilian cattle and beef are produced specifically to meet Chinese import standards.
In 2024, 71% of China’s soybean imports came from Brazil. If Brazil were to produce a variety specifically tailored to Chinese standards, the FAS said this share of imports likely would increase.
“The Soy China initiative signals a deeper alignment of Brazil’s export strategy with Chinese agricultural demands,” the FAS said. “While Brazil currently prioritizes the Chinese market for soybean exports, this initiative could institutionalize a segmented production line exclusively for the PRC, as the country seeks to expand its influence in the South American agriculture market.”
At the same time, the second-most populous country is looking to become self-sufficient in its oilseed and grain supplies and is implementing domestic support programs that focus on yield improvements over trait or quality improvements, the FAS said.
“With Beijing’s focus on food and feed security, area is expected to remain stable, and imports will continue to face policy and regulatory challenges,” it said, noting that wheat and corn imports are expected to decrease significantly from 2023-24 levels. Sources have said Beijing has been limiting grain imports since April 2024 by implementing various barriers, including delaying customs clearance and delaying tariff rate quota issuances.
Soybean imports are expected to increase slightly from 2024-25 but are down from the record high of 112.2 million tonnes reached in 2023-24, which was driven in part by state-directed purchases for soybean reserves, the FAS said.
China currently feeds 22% of the world’s population with just 7% of the arable land. Corn production in 2025-26 is expected to increase 1.7% year over year due to improved yields, with genetically engineered corn plantings expected to increase significantly, the FAS said.
Wheat production is also expected to increase 1.5% due to improved yield and steady planted area, while rice production is estimated to increase slightly.
Soybean production is expected to see a very slight decline, the FAS said, as producers are dependent on subsidies. Farmers have been disheartened by steep price declines at harvest time the past two years, the FAS said.
Crop production
Corn production in 2025-26 is forecast at 300 million tonnes with a slightly lower corn planted area compared to 2024-25, due to depressed post-harvest farmgate corn prices, the FAS said.
“Some farmers may switch to soybeans as higher subsidies give farmers a guaranteed return,” the FAS said.
Total corn consumption in 2025-26 is projected to reach 321 million tonnes, a 1% increase year over year, due in part to a return to traditional corn usage in feed rations. Feed use accounts for about 65% of China’s total corn consumption. The ratio of corn in feed rations is expected to trend higher by 6.7% than in the previous year.
Corn imports are estimated at 8 million tonnes, 1 million tonnes higher than the 2024-25 estimate but down from 23.4 million tonnes in 2023-24.
“China continues to promote higher local production via better yield on stable area, and the CCP government discourages grain imports to protect the interests of local farmers,” the FAS said.
Improved yield and steady planted area will increase wheat production by 1.5% in 2025-26 to 142 million tonnes. Decent yields and guaranteed returns are encouraging farmers to plant wheat, the FAS said.
Wheat imports are forecast to be higher than 2024-25 but are lower than 2023-24 due to China’s tariff policies and cancellation of orders. Consumption for food use is stable, but wheat flour demand has declined for three consecutive years, primarily because of a shrinking labour force and an aging population, the FAS said.
China’s population fell for the third straight year to 1.408 billion by the end of 2024, a decrease of 1.39 million people from the previous year, the FAS said. More than 20% of the population is aged 60 or older, and by 2035, that is expected to be higher than 30%.
Young people’s diets continue to shift to consumption of more convenient and on-the-go foods such as bread and bakery products, which is expected to drive growth in the coming year.
“However, household use of flour to make traditional staple food such as steamed buns and pancakes has dropped as younger generations dislike time-consuming cooking processes compared with convenience,” the FAS said.
About 80% of China’s flour traditionally has been used for steamed and boiled foods and frozen items. This requires flour with a low ash content, bright color and lower damaged starch.
China has 1,500 flour milling facilities, which utilize 86 million tonnes of wheat per year, according to a presentation by Golden Grain in 2023. The top three largest companies utilize 55.5 million tonnes of wheat per year. They include Wudeli with a capacity of 85,000 tpd, Yihai (Wilmar China) with a capacity of 55,000 tpd, and COFCO with a capacity of 40,000 tpd.
“The catering industry rebounded from 2022 to 2024, offering some hope for improved flour demand,” the FAS said. “Leading milling plants remain stable and operate with slim profits.”
Soybean demand keeps rising
Soybean production for 2025-26 is estimated at 19.8 million tonnes, down slightly from production estimates for 2024-25, mostly due to a significant decline in soybean prices that Chinese farmers receive.
Consumption is estimated at 124.4 million tonnes, up slightly from the 122 million tonnes used in 2024-25, the FAS said. Chinese soybean demand has increased by 4.6 million tonnes per year on average in the 20 years from 2002-03 to 2022-23. A pause in that trend is expected, the FAS said, based on a number of market and policy-driven factors.
“Two important headwinds for soybean demand in China are the slowdown in the broader economy and the government’s efforts to reduce demand for soybean meal,” the FAS said.
Soybean crush is estimated at 101 million tonnes, up 2% from 2024-25 on an expected slow recovery in feed demand. Food use of soybeans is expected to reach 17.5 million tonnes, a slight increase from the previous year.
Imports are forecast at 106 million tonnes, up 1.9% from 2024-25. Slower import demand is expected in the coming years in response to slower demand growth for soybean meal, the FAS said.
By 2034, China expects its support of technological advancement and promotion of high-yield, stress-resistant crop varieties will increase grain yield by 7.8% to 6.3 tonnes per hectare, according to the China Agricultural Outlook (2025-2034), released this April. Total output will reach 753 million tonnes and cultivated area will stabilize at 119 million hectares.
Corn yields are expected to reach 7.35 tonnes per hectare, while soybean yields will reach 2.78 tonnes per hectare, according to the outlook. Soybean output is expected to increase at an average annual rate of 5.3% while imports are expected to fall to 79.03 million tonnes by 2034, it said.
Imports of wheat and corn also will see notable declines, with total grain imports projected to drop to 113 million tonnes by 2034, with an average annual decrease of 3.1%, the report said. Overall trade is expected to see structural changes, the China Agricultural Outlook said, with greater diversification in import sources.