China strategises to increase soy crushing with ban

China's ban on Argentine soyoil is more about the Asian nation's strategy of lowering oil imports and increasing crushing than quality controls, Argentina's agricultural secretary said.

"We must start thinking that China will start going toward more industrialisation of beans in China," Lorenzo Basso said. "China has built a lot of crushing plants and refineries in recent years. They will never self-supply themselves with soy, but will try to buy beans to crush."

China, the world's largest consumer of soyoil, on April 1 banned imports of Argentine soyoil due to quality standards being breached. The countries are negotiating the issue. Argentina, the world's largest producer of soyoil, supplies about 75% of China's demand.

Soy prices gained earlier in Chicago on speculation that China may increase purchases from the US, the world's largest shipper of the oilseed. Brazil and Argentina are the second- and third-biggest growers, respectively.

Soy futures for July delivery climbed 7.5 cents, or 0.8%, to US$9.94 a bushel on the CBOT.

China can not turn to Brazil or the US to compensate for a lack of Argentine soyoil supplies, Basso said. Prices in the US are a bit too high and Brazil does not have enough capacity to cover the Asian country's demand, he said.

US exporters sold 232,000 tonnes of soy to China for delivery after September 1, USDA said.