18 CHAPTER 2
Figure 2.7 Chinese imports of soybeans and soybean oil, 1990–2008 Soybean exports or imports (thousand metric tons)
80,000 Chinese imports
Global imports excluding China Exports from United States, Brazil, Argentina
60,000
40,000
20,000
0
Source: Constructed by the authors using data from USDA (2008c). Note:
Global imports also equal global exports.
exporters. However, one factor we have to consider is interaction effects. A plausible hypothesis is that increasing soybean demand from China from 1995 onward reduced a great deal of the slack in U.S. soybean and maize markets (the two crops compete for land) such that when the biofuels surge occurred, the competition for land between maize and soybeans became much tighter. Consistent with this hypothesis, Figure 2.3 suggests that U.S. maize and soy- bean prices have tracked each other closely during 2005–09. China and India may have had a third indirect effect on food prices by means of depletion of stocks. Largely because of increased demand for meat, grain consumption has risen rapidly in China from 1991 to the present, and it has often outpaced production growth. For example, maize consumption in China increased by 88 percent, but production increased by only 55 percent. Because China hardly imports any maize (it is generally one of the larger net exporters of maize), most of this excess demand was satisfied through the depletion of stocks.
Of course, China may have contributed in some small way to the crisis through the depletion of stocks, but this seems fairly unlikely. For one thing,
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