China's soymeal exports to rise on new capacity

 

 

China will likely become a regular exporter of soymeal into Asia as it boosts its soy processing capacity by more than 20% in the next two years, a top US industry official said on Tuesday (June 29).

 

By the end of 2012, China - the world's largest soy importer - will boost its total daily crushing capacity by 58,000 tonnes from the current 244,150 tonnes, according to Phillip Laney, China country director for the US Soybean Export Council.

 

"They are going to have a lot more excess crushing capacity; more and more meal will be shipped to Japan," he said, adding that it can become a regular supplier as these are large scale modern plants being set up which will be well managed and operated.

 

According to the China National Grain and Oils Information Centre (CNGOIC), China's soy industry will have another six million tonnes of crushing capacity in operation this year, raising total capacity to 100 million tonnes by end-2010.

 

Although China is not a regular supplier of soymeal into Asia, its exports between January and May jumped 59% to 455,136 tonnes, with the bulk of it going to Japan.

 

South Korea and Vietnam have been other key importers of Chinese soymeal, a key ingredient for animal feed.

 

Asian soymeal importers mostly depend on supplies from South America and India, but India has been largely absent from the market due to higher domestic bean prices.

 

Laney said the rise in capacity would be led by Chinese firms, as China, which currently uses only half of its crushing capacity, does not allow foreign soy processors to increase their capacity.

 

Among six new plants are two owned by state-run COFCO Co Ltd, one in Guangxi and another in Tianjin, CNGOIC said.

 

Another state-owned firm, Sinograin, which manages the central government grain reserves, will start operating two soy plants in Dongguan, Guangdong province and Zhanjiang, Jiangsu province in the east, CNGOIC said.

 

Laney said he was not sure if the government will encourage soymeal exports by giving tax subsidies as done in the past.

 

Meanwhile, CNGOIC expects soy imports to reach a record 46 million tonnes in 2009-2010 (October-September), up 11.9% from the previous year and higher than a prior estimate of 44 million tonnes.