March 18, 2009

China's soy imports in the second quarter of this year may fall on year due to lower global prices, said a government think tank Tuesday (March 17).

Significant lower soy prices in February will keep traders and processing plants on the sidelines as they are making losses on earlier purchases, and they may even cancel earlier contracts, the China National Grain and Oils Information Centre said in a report.

However, higher purchases in earlier months of the 2008-09 crop year that began in October are likely to result in a rise in soybean imports in the first seven months to 22.14 million tonnes, up 14 percent over the same period of the previous crop year, it said.

The centre expects soy imports in March and April at 3.5 million and 3.6 million tonnes, respectively.

It also expects soyoil imports to pick up during March-May due to lower import costs.

Soyoil imports in January-May are likely to be nearly 800,000 tonnes, compared with 1.13 million tonnes in the same period last year, CNGOIC said.

Low-cost imported soyoil and weak demand are likely to weaken domestic soyoil prices, it said.

China imported around 60,000 tonnes of soyoil in the first two months of this year, down nearly 90 percent on year, according to data from the General Administration of Customs.