May 11, 2012

 

China's January-April soy imports rise 22.3% on-year

 

 

In the January-to-April period, the soy imports of China rose 22.3% on-year, whereas foreign purchases are seen to remain climbing in the near-term.

 

But traders cautioned a rise in imports may be capped as surging CBOT soy prices amid a drought-reduced South American crop would lure crushers in China to the relatively cheaper state reserves.

 

"China's imports in the coming months are seen rising significantly. The large imports would ease a supply shortage for crushers in coastal areas, which would run at a high capacity in the second quarter of the year," the China National Grain and Oils Information Center (CNGOIC) said in a report.

 

Soy imports in May are expected to rise to between 5.7 to 6 million tonnes, the official think-tank said. (www.grain.gov.cn)

 

Imports in April rose 26% from a year ago to 4.88 million tonnes, data from the General Administration of Customs of China showed on Thursday (May 10).

 

Crushing margins peaked in April to more than RMB400 (US$63.39) to process one tonne of the oilseed into soymeal, a feed ingredient and cooking oil, although margins have weakened this month over rising import costs, CNGOIC said.

 

The recent rise in global prices have slowed down purchases for shipment between July and September, traders said.

 

"Some crushers have not booked enough for the period as the current Chicago prices would give negative margins," a trader said. Chicago soy hit their highest in almost four years in April and have soared about 20% so far in 2012.

 

Traders said expensive imports would prompt some crushers to turn to cheaper government stockpiles.

 

Beijing has plans to auction more from state reserves in the country's northeast provinces, a major soy area, although the release is expected to have little impact on imports as crushers in these areas only process domestic soy.

 

The government held between 3-4 million tonnes of old soy stocks from harvests as far as 2008 and it also stockpiled 3.5 million tonnes from its 2011 harvest.

 

China's soy imports in 2011/12 (Oct/Sept) may rise 8.9% from the previous year to about 57 million tonnes, according to an estimate by the CNGOIC.