February 14, 2011

China's soy demand tightens global export availability

China's soy import demand is pressuring global export availability of the oilseed, which is likely to fall short of USDA forecast and fuel a further rally, Rabobank said in a report Friday (Feb 11).

CBOT soy prices have risen 18% over the last three months, while Chinese prices have risen 4.5%, as the government has been taking various measures to increase supply in the domestic market and restrain inflationary pressures.

Rabobank's forecast showed combined soy output in the world's three largest exporters, the US, Brazil and Argentina, is likely to decline by nine million tonnes in 2011.

This will reduce global export availability by more than four million tonnes from the USDA's current 98.7 million-tonne forecast, the bank said.

China imported 5.5 million tonnes of soy in November and 5.4 million in December. In 2010, soy imports rose 29% to a record 54.8 million tonnes.

November and December imports by China are "well over the monthly 4.75 million-tonne pace needed to reach the USDA's 57 million-tonne import forecast for the 2010-11 season," it added.