April 15, 2008

China think tank sees slowdown in soy import growth

China's soy import growth in the 2008-09 crop year will likely slow down due to an increase in oilseeds output, according to China National Grain and Oils Information Centre (CNGOIC) on Tuesday.

China's soy imports in the 2008-09 crop year starting October are expected to reach 35 million tonnes, up 2.9 percent from a year earlier, said Cao Zhi, an analyst at CNGOIC.

The country's soy imports in the 2007-08 crop year are seen rising 18.3 percent to 34 million tonnes, he said.

The growth in edible oil supply will exceed that of demand, helping to increase ending stocks, Cao said.

He also said domestic edible oil supply in 2008 will likely increase by 432,000 tonnes, while edible oil consumption could rise by 100,000-110,000 tonnes.

Vegetable oil prices will likely be stable or even fall in the second half of the year, with first grade soy oil prices remaining in the RMB 10,000-RMB 16,000 per tonne range this year, Cao said.

The current high soy oil prices will also encourage demand for palm oil, and China's palm oil imports in the second quarter are likely to reach 1.6 million-1.7 million tonnes, far above the 400,000 tonnes in the same period last year, Cao said.

China's soy oil imports in the first quarter totalled 700,000-800,000 tonnes, while palm oil imports were 1.1 million-1.2 million tonnes, according to CNGOIC's estimate.