June 23, 2012

China's May agricultural imports soar on bargain hunting

The key industrial and agricultural commodities imports of China jumped in May, showing that price drops, relatively low inflation and an increasingly dovish central bank brought opportunistic buyers back in to the market.

The data, disclosed Thursday (June 21) by Chinese customs officials, were in line with preliminary trade data released earlier this month.

Grain imports resumed climbing in May, with corn shipments up seven times on month to 116,315 tonnes.

Wheat imports rose to 556,603 tonnes, their highest monthly level in five years amid worries that China's spring wheat harvest may shrink due to disease and unfavourable weather. The state-backed China National Grain and Oils Information Center last week revised its forecast for China's wheat output this year downward from May, though it said the overall crop would still rise 0.07% from 2011.

Analysts had widely tipped a deepening slowdown after two successive months of lower import volumes, on the back of decelerating industrial output and manufacturing activity, particularly in April.

However, the Ministry of Commerce in late May had given a forecast that trade may have recovered. Vice Minister Li Jinzao told reporters that China's foreign trade had improved in the first half of May, though he warned that the global trade environment remained "relatively tough."