January 27, 2012

 

China's agricultural product import volumes set new records

 

 

In December, China's grain, cotton and sugar imports soared on a wave of big purchases and year-end contract fulfilments, US customs data showed Saturday (Jan 21).

 

Corn shipments nearly increased to 400 times on-year to the highest level in more than a decade as China took delivery of orders from the US.

 

Import appetite in the world's second-largest economy is closely watched as a proxy for consumption amid macroeconomic weakness and external growth headwinds.

 

While import values fell last month, volumes mostly rose as traders took advantage of bargain prices in preceding months.

 

"China's growth is still relatively subdued but the economy ended the Year of the Rabbit with a spring in its step," Capital Economics said in a note.

 

Cyclical factors and opportunistic predominated year-end bookings rather than of strong underlying demand, analysts said.

 

"China has clearly been taking advantage of the low prices and has already been trading opportunistically again," Commerzbank said.

 

Domestic shortages and low global prices spurred sharp increases in cotton and sugar imports, which in both cases reached record monthly volumes last month.

 

For cotton, December shipments rose 71% on-year while 2011 imports were up 19%.

 

Wheat imports also surged around 45 times on year to reach 217,493 tonnes in December, with full-year volumes edging up a more modest 2.5% to 1.2 million tonnes.

 

Corn imports for 2011 rose 11.5% to reach 1.7 million tonnes.

 

While the volume is the highest annual import level in about 15 years for China, it is well off analyst expectations of around five million tonnes, largely due to a strong domestic harvest last year.

 

The December shipment of 569,763 tonnes was the largest monthly volume in at least two years, mostly the result of already-reported bookings earlier in the year for US corn from state stockpiler China Grain Reserves Corp., also called Sinograin, to replenish depleted official reserves.

 

The US accounted for 93% of the shipments while Myanmar and Laos accounted for the rest.