March 28, 2012

China to raise April/June soy imports

In the April-June 2012 quarter, China may raise soy imports, including purchases of old crop US soy, as it aims to meet strong local demand and build up supplies, Hamburg-based oilseeds analysts Oil World said Tuesday (Mar 27).

Oil World forecasts that China, the world's top soy buyer, will import 55.6 million tonnes of soy between October 2011 and September 2012, up from 52.3 million the year before.

A Chinese state analyst forecast on March 21 that the country would increase imports of soy by about 25% in the first half of 2012 from the same period a year ago.

"Although we consider this estimate to be somewhat on the high side, it is an indication that China is determined to sharply raise soybean imports in the April/June quarter," Oil World said.

It added, "We assume that this will also require new Chinese purchases of old-crop US soybeans for shipment from April onward."

Imports are needed to satisfy rising demand from China's oilseed crushing industry and to raise reserve stocks as a cushion against any weather problems and crop scares in the US this summer, it added.

Soy prices are likely to remain high, Oil World said. US soy futures soared to a six-month high on Monday on diminishing projections for the crop in Brazil, while hopes of new global demand for soy have also supported the Chicago market in past days.

"There is a high probability that they (soybean futures) will exceed US$14 per bushel in the July 2012 contract," it said. The contract was at US$13.90-1/2 at 1012 GMT.