China's soy imports to peak in next two months

Soy imports of China will propel in July and August as domestically produced soy stock falls to almost nothing, analyst Li Haihua of Donghai Grain & Oil Ltd., said.

Li estimates that soy import in June will reach 4 million tonnes and all coastal ports will be busy processing imports. This situation may last until the next soy harvest later this year, he added.

From January to May, China purchased a total of 13.65 million tonnes of soy, a surge of 20.4 percent on-year.

The US is the primary supplier of soy to China, with USDA forecasting a total of 35.5 million tonnes to be shipped to China in 2008-09.

Meanwhile, the China National Grain & Oil Information Center (CNGOIC) has predicted domestic soy production to hit 16.5 million tonnes, which would place China's soy import dependence at nearly 70 percent.

Wang Xiaoyu, with the Heilongjiang Soybean Association, told Interfax that there are only 300,000 tonnes to 400,000 tonnes of soy still being held by farmers in Heilongjiang province.

Soy is trading at an average price of RMB5,000 (US$726.79) per tonne and while dealers still have some stocks, the total amount is unclear. Large soy oil factories have stockpiles that will sustain less than one month of production, Wang pointed out.

Heilongjiang accounts for 60 percent of China's annual soy output. According to Wang, the limited soy stockpiles in Heilongjiang are not sufficient to sustain local consumption. As a result, regions outside the three provinces in northeastern China rely almost entirely on imported soy.