April 19, 2011

China will likely import 53 million tonnes of soy this crop year, down 7% from a key USDA estimate, Rabobank forecast Monday (Apr 18).

The lowered forecast would still mean a record import volume in the year ending September 30, and a 5% increase from 50.35 million tonnes of inbound shipments in 2009-10.

The estimate - four million tonnes below the USDA forecast - is due to Chinese import demand slowing, Rabobank said.

"As crush margins have turned negative in recent weeks and large stockpiles of soy persist at the country's ports, total season import expectations have been revised lower," said Rabobank's Global Head Luke Chandler.

A price cap on soyoil imposed by China's government for the last five months is discouraging crushing demand, as it weakens margins. The government has asked major edible oil producers not to raise prices for an unspecified period, as the country grapples with three-year-high inflation levels.

China imported 10.96 million tonnes of soy in the January-March period, down 0.7% compared with the same period last year.

Amid soaring global soy prices, the most actively traded soy futures contract on the Dalian Commodity Exchange has only gained marginally so far this year, rising RMB13 (US$2) since January 4 to settle Monday at RMB4,548 (US$697)/tonne.

Rabobank noted that tight inventory levels across most agricultural products are likely to keep upward pressure on global prices until the third quarter of the year, when northern hemisphere new supplies are more assured.