“Importing works best for the market right now”/
Zooming in on China’s pulses trade

The increase in plant-based diets and pea-protein use in everyday foods has turned yellow peas into a pulse product in increasing demand. 

Despite a downturn in prices in 2023, the global market for yellow peas hit $ 2.1 billion in 2022 and is expected to reach $5.3 billion by 2023, according to research published by DataM Intelligence. Growing popularity can be attributed to one particular powerhouse, whose domestic use far outstrips India and Pakistan: China. 

Domestic consumption for China has averaged at around 3.6 million metric tonnes for the past four years, according to Pulse Atlas data. This heavy demand is delivered both through the country’s own production and, increasingly, through reliable imports. Despite a marginal dip in 2022, this year’s imports are projected to hit 2.3 million metric tonnes, the highest it has been since 2020. 

Weihua Meng, Managing Director of Nanjing Bonagro International Trading Company, said: “About 50 years ago, China's pulses exports averaged at around 800,000 MT, but last year we only exported around 46,000 metric tonnes of pulses.”

He added: “Import costs work out a lot cheaper than local costs and the government has let farmers grow soybeans, which bring in a higher profit.” 

Nanjing Bonagro is an agricultural trading company based in Nanjing, the capital of China’s eastern Jiangsu province. The company imports a vast range of pulses, flaxseeds and oilseeds, importing a total of 220,000 MT last year.

China’s main import port is based in Qingdao, in the Shandong province, where there are many pea protein factories specifically for noodles.

Regarding where the majority of stock comes from, Canada has been a consistent partner for green and yellow peas. From the beginning of the year to July, China imported 700,000 metric tonnes of peas from Canada. 

Russia and Australia are also large exporters of China, supplying around 110,000 MT and 60,000 MT respectively, according to Mr Meng.

“This year, our main importer is still Canada but I think from next year, if we check the official data, you may see that Russia has increased their exports of yellow peas to China because of the price,” said Mr Meng. Imports have increased from Russia by 10,000 MT compared to last year because the price of Russian yellow peas is around 15% to 30% cheaper than Canadian peas. Nanjing Bonagro pays 3300 Chinese Yen for Russian yellow pea imports. 

Mr Meng said: “In terms of currencies, we can pay in Chinese Yen. And for us, this is a lot better because it means the exchange rate is fixed. So the cost is very good for the Chinese market.”

Though Russian imports have increased, what that stock is used for differs from prime Canadian peas. 

“Russian yellow peas are mostly used for animal feed because of their quality, they cannot be used for noodles.”

Demand for animal feed has increased mostly in the west of China in Xinjiang, but the main use for yellow peas, and pulses as a whole, is for humans. 

Mr Meng said: “Before, maybe five years ago, India was the number one for buying peas from North America, but now China is number one … because it has many demands, like for noodles, because there are many regions, like the North of China, where they like eating noodles instead of rice.”

“Chinese people have very traditional consumption habits with snack foods. So green peas are mostly used for snack foods, where they fry the peas and mix them with different spices like cumin and chilli.”

Apart from peas, kidney beans have also become a dinner table staple for China. 

“Chinese people are now changing their consumption habits. Before they only ate rice, now, you find that every hotel has kidney beans. Now people are cooking beans with soup.”

Kidney beans, specifically dark kidney beans, were produced widely in China, but the Government has encouraged farmers to move toward soybeans, giving them subsidies for doing so. 

“This year, for dark red kidney beans, we produced no more than 15,000 metric tonnes. Normally in China, we have around 30 to 40,000 metric tonnes.” 

The reason for making the switch links back to importing being more cost-efficient than buying and producing locally. It is because of this that outsourcing processing to other countries also comes part in parcel with China’s pulse market. 

“Now for outsourcing policies, China still purchases mostly from North America, because of licensing. The government has now opened up pulses outsourcing, for crops like kidney beans, to more than seven countries. But for a very long time, only the USA and Canada had a licence. North America's quality was always very good for the Chinese market.” 

Mr Meng added: “China also has a focus on South America, namely Argentina, and Brazil. But currently, it is almost impossible because of the licensing system. The government has not opened the licence to these South American countries.” 

The main issue for China when it comes to opening up to more importers is the rigorous General Administration of Customs of the People's Republic of China (GACC) approval process. 

“When countries want to export to China, they must first pass the first check, the Chinese government releases importer licences based on the first check,” said Mr Meng. “Then there is a second check. Okay. If the country already has an importer license, they still need to pass through GACC registration. This is a part of our custom rules, but many suppliers do not understand that.” 

Despite this communication barrier, the global stage is very much interested in the Chinese market. 

Mr Meng said: “I just came back from the USA last week, and all the sellers and all the suppliers are focused on the Chinese market because they also see that it has changed so much.”