Additional Shipment of Russian Soybeans Energizes China's Trade Scene

China: A significant moment was marked on Friday as 271.6 tons of Russian soybeans arrived at Manzhouli Port situated in Inner Mongolia Autonomous Region, North China. The recent shipment of Russian Soybeans to China marked the debut of such transportation since the inception of the New Land Grain Corridor. This corridor links China with other countries under the Eurasian Union, including Russia.

The import of Soybeans from Russia not only signifies the strengthened win-win cooperation between China and Russia in farming trade but also satisfies the market need for diversifying sources of supplies for food security reasons. This will lead to reduced reliance on singular suppliers, particularly the US.

After arriving at Manzhouli Port, the shipment of Soybeans will be transported to Tianjin city to undergo oil extraction before entering the market. A substantial rise in the supply of Russian soybeans is anticipated over the long run, with approximately 8 million tons of Russian grains, comprising Soybeans, arriving at Manzhouli Port every year. This will contribute to the injection of new impetus into bilateral trade ties.

China is known to be a significant Soybean consumer, and Russia is a large grain producer. The cooperation on Soybeans has been emphasized since the signing of a development plan in 2019 between the two countries. This plan covers a wide range of areas, including planting, processing, research, development, and trade.

The newly established import channel from Russia is a significant contributor to trade facilitation between China and Russia. It also marks a crucial direction for China's diversification of Soybean imports. China's approach to importing grains and collaborating with offshore farming has reached a significant milestone with the recent inaugural shipment through Manzhouli Port. The new trade route is also an effort to reduce reliance on singular countries, particularly the US.

China imports approximately 85 percent or almost 100 million tons of domestically consumed Soybeans from overseas each year. The US and Brazil are two major suppliers. It is imperative to elevate soybean production capacity and improve domestic self-sufficiency rate due to the excessive dependence on foreign suppliers.

The changing geopolitical and economic landscape makes it unwise to import Soybeans from the Americas, especially the US. Instead, suggests that importing Soybeans from Russia can help hedge against potential reductions in US food exports to China and increase the security of China's food supply. Additionally, importing Soybeans from Russia can help to elevate the status of the Chinese yuan in international cross-border settlement.

There are issues with the security and stability of supply chains when it comes to trade between China and the US. The US often creates problems in bilateral relations, making it more challenging to maintain a stable trade relationship. Despite only accounting for a small percentage of China's total imports, mainly due to the country's relatively low production capacity, there is still potential to tap into future opportunities because Russian Soybeans are of exceptional quality.

The high protein content and non-genetically modified nature of Russian Soybeans are significant advantages that Chinese consumers will appreciate.

Russia and China share an extended land border and have a strong political relationship. The opening of various logistic lines, including the Tongjiang-Nizhneleninskoye railway bridge, has made bilateral trade more accessible and faster.