• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Soybeans. Regarding its 5000 years of history in soybeans production, China remains one of the few countries to provide almost exclusively non-GM soybeans. The new regulations passed by the government in 2006 on labeling standards regarding GM vs. non-GM

Free essay example:

CASE REPORT

INTERNATIONAL STRATEGY AND ORGANIZATION

image00.png


SOYBEANS IN CHINA

The soybean is the most widely grown and consumed legume in the world because of its unique health benefits. It was originally used in East Asia, in particular Japan and China as a food crop for animals and over time expanded its use for human consumption in cooking oils and margarine, soya milk, soy sauce, or processed into tofu, miso, or textured vegetable protein. Secondly, soybean residue generated by the soybean oil extraction process is rich in proteins, which is why this byproduct is a main ingredient in feed for livestock and poultry.

For more than 5000 years China has been the leading producers of soybeans, owning in 1938 93% of world output. Since then, countries like United States, Brazil and Argentina started producing soybeans, which leads us to today’s leading producer the United States. The table below shows the quantity of produced soybeans by the main global players in this area.

Soybeans: production

(m tonnes)

2008/09

2009/10

2010/11

2011/12

2012/13

US

80.7

91.4

90.6

83.2

86.0

Brazil

57.2

68.7

75.3

77.0

79.0

Argentina

32.0

52.7

48.8

51.0

54.0

China

15.5

15.0

15.2

14.3

14.0

India

9.9

10.0

12.6

11.5

11.9

Paraguay

4.0

7.4

8.3

7.8

8.2

Others

13.4

14.0

14.4

14.7

15.0

Total

212.8

259.2

265.2

259.5

268.1

% change

-4.4

21.8

2.3

-2.2

3.3

Sources: USDA; Economist Intelligence Unit; national statistics.

While China’s production of soybeans is expected to decline from 15.2 tonnes in 2010/11 to 14 tonnes in 2012/13, the expansion forecast in world consumption in the following years is still centered on a rise in Chinese domestic demand. The Economist Intelligence Unit anticipates the soybeans use in China to rise from 66 tonnes in 2010/2011 to 76.4 tonnes in 2012/2013, which leads to the conclusion that Chinese imports of soybeans will continue to grow in the next few years, endangering the domestic production.

Soybeans: consumption

(m tonnes)

2008/09

2009/10

2010/11

2011/12

2012/13

China

51.4

59.4

66.0

71.6

76.4

US

48.1

50.6

48.3

47.5

48.5

Argentina

32.8

35.7

40.0

41.5

42.5

Brazil

34.7

36.6

37.0

39.0

40.0

EU

14.1

13.6

14.3

14.1

14.4

India

9.5

9.5

12.1

11.1

11.4

Other Asia

12.7

13.4

14.4

15.2

15.7

Others

18.8

20.8

22.0

22.5

23.1

Total

222.2

239.6

254.1

262.5

272.0

% change

-4.1

7.8

6.1

3.3

3.6

Sources: United States Department of Agriculture (USDA); Economist Intelligence Unit.

The reason why soybean production is getting more and more unattractive for Chinese farmers, is the fact that the government offers every year subsidies for wheat and corn, while subsidies for soybeans are insignificant. Besides that, another significant reason why domestic soybeans are not as competitive as imports is because soybeans are mainly planted in the Northeast of China, whereas the majority of soybean oil processing companies are concentrated along the coast. This makes the cost of domestic soybeans (including transportation and storage) to be much higher than imported soybeans. More than half of this price difference can be justified by the agricultural subsidies offered by the competing countries, which can reach to over 20%. Furthermore, another important factor that determines the attractiveness of the soybeans is the quantity of oil that can be extracted from the bean. Currently the oil extraction rate of domestic soybeans reaches 16%-17%, which is 2%-3% lower than that of imported ones. Taking into consideration all the above mentioned reasons, there is no wonder that soybeans oil producers in China will opt for the better quality and the lower prices of imported soybeans.[1]

When it comes to genetically modified plants, soybean is one of the most widely grown genetically modified plants in the world today. In 2007, more than 58 % of the world’s soybean crop was genetically modified. GM soybeans were first introduced in United States in 1996 by the biotech giant Monsanto. The bean was modified by introducing a copy of a gene from the Agrobacterium sp. strain CP4. Conventional soybean has a similar gene in its DNA but is sensitive to glyphosate, the active ingredient of the herbicide Roundup. With the insertion of the CP4 version of the gene, the GM soybean was able to develop resistance to the Roundup herbicide.By 2006, the use of GM soybeans increased to 89%. Nowadays, GM soybeans dominate in terms of total production the world market. The United States and Argentina are producing almost exclusively GM soybeans.[2]Large amounts of GM soybeans can also be found in Canada, Uruguay, Paraguay and South Africa. The harmful effect of GM soybeans on human health is a concerning subject, this is why the lack of proper labeling of GM foods makes the consumers to be more and more vigilant of what they are eating.

Regarding its 5000 years of history in soybeans production, China remains one of the few countries to provide almost exclusively non-GM soybeans. The new regulations passed by the government in 2006 on labeling standards regarding GM vs. non-GM soybeans oil might bring new hope to domestic soybeans producers. Further measures that may help support de domestic soybean production in China are:

  • Investments and incentives towards infrastructure improvement
  • Additional farmland to increase production
  • Better product quality and lower production costs
  • Modernization of machinery and facilities
  • Incentives for opening oil processing facilities near the farmland
  • Research and financial support for increasing the quality of the GM-free soybeans in order to meet the standards in exporting markets
  • Incentives for investments at home (e.g. loosen tax policy)
  • Careful approach considering the complementary industries (wheat, grain etc.)

All in all, a combination of government measures and consumer awareness of the impact of GM soybeans on the human health might be a successful receipt for saving an industry, which was carried on for more than 5000 years by Chinese farmers.



[1] Integrative Case 5 – Soybeans in China

[2]http://www.gm.org/gm-foods/a-look-at-gm-soybeans/

This student written piece of work is one of many that can be found in our University Degree Marketing section.

(?)
Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Related University Degree Business and Administrative studies Skills and Knowledge Essays

See our best essays

Related University Degree Marketing essays

  1. The aim of this report is to provide details regarding the marketing rationale behind ...

    Specifically, the emphasis of the brand is stressed in the unconventional scenes where consumer's attention is maximised on what they observe in the advertisement in relation to the product. Some of the unconventional scenes include the actor sleeping and showering with his shoes on and wearing them during intimate moments.

  2. Online VS Offline

    Third, consumers can easily compare product features, availability, and prices more efficiently and effectively than with brick-and-mortar shopping. Fourth, Internet shopping provides a level of anonymity when shopping for certain sensitive products. Fifth, online shopping offers a high level of convenience for those whose time costs are perceived to be

  1. Google vs Yahoo

    The Google founders use page rank algorithms to interpret links to web pages as votes of importance (Cusumano, 2004). They also use algorithms, which is just advanced math, to review hypertext links to focal sites instead of just using key words to search so that the user is provided with better results when doing a search (Cusumano, 2004).

  2. Nokia(TM)s dominant mobile business in China

    and Jiangxi PTA (Post and Telecommunications Administration) signed a contract, which valued at nearly $35 million, to expand the latter's GSM network. From then on, 'Nokia claims to be the first company to bring in GSM technology to mainland China' (Merriden, T, 2001). Meanwhile Nokia's GSM/DCS technology also supplied to 52 operators in 31 countries (Steinbock, 2001).

  1. Nick vs Adidas

    Social: The average life age of person has increased. Sports and health plays a great role in a day to day life. Increased interest in sports and leisure Increased popularity of visiting gyms and health clubs (especially among women): In modern World everyone want to look good but to feel good.

  2. Unix vs Windows

    But having a workstation with only an operating system is not a workstation that will allow a business to be productive. There are applications that are needed in order to have a productive workstation. An office suite is needed which has document, spreadsheet, database and presentation software.

  1. Beccel Margarine

    On average, people that buy margarine also buy butter for cooking purposes. Beccel has a number of opportunities. Beccel can market to the younger consumer and the consumer with the lower income. Margarine is often seen as a low-priced butter substitute, and would therefore fit the price needs of the lower income families.

  2. Research method report -attitudes to GM technology.

    Bear the controversial debate in mind, the author would try to find out where the controversial opinions lie in and how the genetically modified crop is controversial. In addition, in order to elicit the viewpoints of the student of those differences in perception on the genetically modified crops, the quantitative research and qualitative research method are employed.

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work