April 17, 2009

China's soy imports remained strong on good crushing margins following a recovery of demand for soymeal and traders expect the momentum to last until June.

As soy supplies from Argentina diminished and coupled with China's robust demand for soy, buyers in China had to increase their procurement from Brazil and the US, pushing the Chicago Board of Trade soy futures to a three-month high this week.

A trading manager in Shandong said with the picking up of the livestock breeding industry, the strong soy import trend is likely to continue till May and June.

Meanwhile, traders in the US said China had bought six cargoes from Brazil in the past three days and one or two cargoes of US soy for October-November shipment.

China's soy imports in March reached 3.86 million tonnes and imports in April were seen to increase to four million tonnes.

The recovery in soymeal demand, a protein ingredient in feed, has pushed up prices by 18 percent over the past month. Soyoil prices also rose more than 10 percent, giving crushers a profit of more than RMB300 (US$43.90) per tonne.

Despite a recent dip in domestic soy prices which matched that of imports, crushers were not interested in domestic soy as cheap US soy continued to pour into major Chinese ports. The Chinese government's stockpiling on domestic soy has pushed up prices higher than imports since October's domestic harvest.

Prices of domestic soy have been falling this month as farmers lowered their prices in order to prepare funds for planting next month.