May 30, 2011

 

 

China's National Grain and Oil Information Centre (CNGOIC) Friday (May 27) lowered its soy import forecast for the current crop year to 53 million tonnes, down one million tonnes from its forecast last month.

 

At the same time, the centre said it saw soy imports recovering next year amid falling domestic output, signalling China would be increasingly reliant on foreign supply for its soy-crushing industry, which until 2003 was a net exporter.

 

Soy production in the 2010-11 crop year ending September 30 is expected to reach 15.2 million tonnes, the state-backed grain research arm said, keeping its estimates unchanged from April.

 

The centre's latest forecast places the official agency in line with global assessments, which have largely lowered current-year estimates following three consecutive months of on-year declines in soy imports.

 

This is the first time this year that CNGOIC has lowered its soy import forecast, but the full volume is still a significant increase from the 50.3 million tonnes China imported a year ago.

 

Last month, the USDA cut its 2010-11 soy import estimate for China to 54.5 million tonnes from 58 million tonnes estimated earlier this year. For the next crop year, the USDA expects China to import 58 million tonnes.

 

Influential private-sector analysts are even more bullish on China's import needs, saying China's soy imports in the next crop year would climb sharply to exceed 60 million tonnes.

 

"Lower imports this year will set the stage for increased imports in 2011-12 as was the case in previous years when China's soy demand slowed," Rabobank said in a research note this week.

 

"In our view, the USDA is overstating China's domestic soy production for 2011-12," the bank said, noting the Chinese government itself has said soy plantings in 2011-12 will likely to decline 11% on-year.

 

CNGOIC's view appeared more in line with that of Rabobank. While China kept its domestic soy production estimate unchanged between its April and May forecasts, the CNGOIC is now tipping a lower output for the 2011-12 crop year at 14 million tonnes, even lower than the USDA's 14.8-million-tonne estimate.

 

The centre also cut its soyoil import estimate for the 2010-11 crop year to 1.6 million tonnes from the two million tonnes it forecast last month.