The Impact of Effect Factors on the Changes of China's Soybean Market

Abstract

China has become the biggest soybean importing country in the world in recent years. In this study we have estimated the demand of soybean, soy meal and soy oil in China, due to differences in previous estimated results. In the 2000's results, China's soybean demand was 23.25 million ton, soy meal was 14.68 million ton, and soy oil was 3.58 million ton. A Nerlove adjusted model was used to analyze the impacts of prices and drought factors on China's soybean production, and an double-lag Engel's function was used to measure the income elasticity and price elasticity on demand of soybean, soy meal and soy oil. It was clear that soybean production responded to the change of soybean and rice prices, with income elasticity on the demand of soy meal and soy oil positive and sensitive, and the price elasticity on the demand of soybean in food use, soy meal and soy oil negative and sensitive, especially on the demand of soy oil. As China's population is still increasing, the increase in China's per capital income and sluggish prices in the China's soybean market mean that China's soybean demand will increase, and with it, more dependence on import.