China's soy imports seen robust on good demand

China, the world's largest soy buyer, is likely to import a record 5.8-6 million tonnes of soy in June, according to the China National Grain and Oils Information Centre (CNGOIC).

 

The forecast was up sharply from 4.2 million tonnes of actual arrivals in April.

 

Cheap South America prices following a record harvest there had encouraged Chinese buyers to book more orders, and soy plants are crushing more to take advantage of an uptick in demand from livestock breeders.

 

Prices in recent months had been pretty cheap, but since then prices have gone up and imports may not be as large as these months in the future, said one trading manager with a major crusher in the south.

 

Imports in May are projected at 5.2 million tonnes, and the official think-tank forecast July's imports at five million tonnes, all higher than its earlier estimates, said CNGOIC on its website.

 

"We think five million tonnes of imports are pretty normal, as crushing capacity has increased a lot and feed demand is good during this time of the year," the trading manager said.

 

The centre also revised upward its import forecast for 2009/2010 (October/September) to 46 million tonnes from an early estimate of 44 million tonnes, a rise of 11.9% from the previous year.

 

"Crushing margins have been reasonably good because of strong demand for soymeal, and that is why you are seeing imports at record levels," said one trading manager with an international trading house.

 

Besides healthy demand resulting from the large number of pigs being raised, traders said some of the imports were bought as part of a rotation in state reserves.

 

Some crushers, which had cargos delayed over the past months, have bought about 800,000 tonnes from Sinograin, the government buying agency, which will use imports to refill the same amount to state reserves.

 

Chinese feedmills have also increased the use of soymeal to replace expensive rapeseed meal and cottonseed meal in animal feed production, analysts said.

 

In Shandong province in the north, some feedmills have increased the use of soymeal by 10 %, said analyst Gao Chunlai.

 

Beijing's restriction over imports of canola - similar to rapeseed - has reduced supplies of rapeseed meal, which is more expensive than soymeal, while a lower cotton output last year also cut supplies of cottonseed meal.

 

Initial figures from the National Bureau of Statistics showed that China produced 12.36 million tonnes of animal feed in April, a rise of 21% from the year-ago period.