April 29, 2013

China's soy imports forecast declines over bird flu

Due to the outbreak of bird flu, the International Grains Council (IGC) lowered its forecast on Friday (Apr 19) for China's soy imports in the current marketing year.

Imports in the year ending September 30, for which the IGC has reduced its forecast by two million tonnes to 59 million tonnes, may still be higher compared with actual purchases from overseas of 57.1 million tonnes in 2011-12, the council said. Growth in China's soy imports, which averaged 16% in the last five years, will slow to 3.3% in 2012-13, it said.

The bird-flu outbreak in China has led to the culling of thousands of poultry and raised prospects for reduced demand.

Soys are crushed to extract soymeal that is used in animal feed. China is the world's largest importer of soy, with a more than 60% share of global trade securing the commodity from the US and South America.

China's soy imports fell 9% in the six months through March, according to government estimates. Traders said this was mainly due to acute port congestion in Brazil that delayed shipments which have spilled over to the second quarter.

"Bird flu will reflect in demand during the second half of the year because China has mostly covered its soy import requirements until June," said Freddy Pranteda, director at Cosur SA, a major South American brokerage for grains and oilseeds.

The IGC cut its forecast for China's soy consumption in 2012-13 by 800,000 tonnes to 75.3 million tonnes but said if realised, it will still be a record-high.