China soy imports drop 14.6% in January

Soy imports by China dropped to 4.08 million tonnes in January from a record 4.78 million tonnes in December.

China's imports of soybeans slipped to 4.08 million tonnes in January from a record 4.78 million tonnes in December, preliminary figures from the country's General Administration of Customs showed on Wednesday.

Analysts at China National Grain and Oils Information Center (CNGOIC) had expected imports of about 4.5 million tonnes in the month after strong demand and good crushing margins prompted aggressive buying by Chinese soy crushers in recent months.

Despite the 14.6% drop from December, January's imports still represented China's fifth-highest monthly volume ever.

The heavy volume of imports booked, coupled with spreading pig disease, which has weakened demand for animal feed, cut margins to breakeven or worse at the end of January, and traders expected the wave of imports to slow sharply by the Lunar New Year holiday in mid-February.

The Dalian September soymeal contract <DSMU0>, China's most traded, was also one of the commodity futures hit by China's moves to tighten money supply this year, after a splurge of lending intended to keep the economy running fast in 2009.

China attracted record volumes of soy imports last year as the government offered fixed prices for local crops in a bid to support farm incomes. This year it is continuing to stockpile local crops but attempting to reduce the appetite for imports by offering crushers subsidies for using Chinese soy.

But analysts say China will remain the world's biggest buyer of soy even if it slows the flow of cargoes from overseas.