January 18, 2012

China is likely to increase soy imports through July 2012, but large port inventories at home could hinder near-term purchases, Hamburg-based oilseeds analysts Oil World said Tuesday (Jan 17).

The US, Brazil and Argentina together exported 19.3 million tonnes of soy to China in September/December 2011, up 1.1 million tonnes or 6% on-year, Oil World estimated.

"This indicates a turnaround in Chinese soy imports," Oil World said.

China imported fewer soy in 2011 than in 2010, the first fall in seven years as government measures to cool inflation capped purchases, but analysts expected buying to accelerate this year to fill depleted state reserves.

China, which imports 60% of the soy traded globally, may import 56 million tonnes of the oilseed in August 2011/July 2012 against 53.1 million tonnes in the same year-ago period, Oil World estimated.

However, large port inventories could slow purchasing in the immediate future, it said.

"High arrivals of soy at Chinese ports are currently resulting in rising stocks, which has slowed Chinese purchases on the world market," Oil World said.

Chinese domestic soymeal and soyoil demand was recently smaller than expected, cutting profit margins for China's soy crushers, it said.

"In our opinion this is likely to be a temporary development," it said. "We expect Chinese demand for soymeal to continue to increase sizably this season owing to rising demand in the expanding pork, poultry and aquaculture industries."