BEIJING (Reuters) - China on Thursday cut its forecast for soybean imports for the 2018/19 crop year, warning that higher prices due to Beijing's trade war with Washington will curb demand as farmers switch to alternative ingredients for their animal feed.
Imports of soybeans in the crop year that starts on Oct. 1 will be 93.85 million tonnes, down 1.8 million tonnes, or 2 percent, from last month's estimate, the Ministry of Agriculture and Rural Affairs said in its monthly crop report.
That compares with its estimate of 95.97 million for the 2017/18 crop year and would be the lowest import level since the 2016/17 year, according to U.S. government records.
The ministry's Chinese Agricultural Supply and Demand Estimates (CASDE) report said new 25 percent tariffs on U.S. shipments introduced last week will inflate prices of the oilseed.
Meanwhile, crushers that make meal and oil from the beans will process fewer beans in favour of other protein substitutes. Meal made from rapeseed, peanuts and sunflower seeds are expected to be popular alternatives.
The government also cut its soybean consumption forecast by 2 percent from the previous month's outlook to 109.23 million tonnes. That would still be 1 percent higher than consumption in the 2017/18 crop year.
China on July 6 imposed 25 percent tariffs on $34 billion in U.S. goods, including soybeans, in response to U.S. duties imposed the same day on Chinese products worth a similar value, as the world's top two economies headed into an outright trade war.
The extra tariffs are expected to push up China's soybean import costs by 100 yuan ($14.95) from the previous month's forecast, the CASDE report said.
For other crops, the forecast for China's 2017/18 cotton imports was raised by 200,000 tonnes from the previous month to 1.3 million tonnes.
The outlook for rapeseed output during the 2017/18 crop year was increased from the previous month as major producers promoted different uses of the oilseed though no figure was provided, according to the statement.
($1 = 6.6875 Chinese yuan renminbi)
(Reporting by Hallie Gu and Dominique Patton; Editing by Joseph Radford and Christian Schmollinger)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)