June 30, 2010

China soy imports may gain 6% next year

Soy imports by China, the biggest buyer, may gain at least 6% next year, driven by rising wealth as rural inhabitants move into cities, figures from a US industry group showed.

Imports of "50 million might even be conservative," said Phillip Laney, the China country director for the US Soy Export Council, yesterday (June 29) at a conference in Ho Chi Minh City, Vietnam. "It isn't going to be 60 million," but it could be 51 million tonnes or 52 million tonnes, he said.

China's imports account for more than half of global exports and are forecast at 47 million tonnes this year by the US Foreign Agricultural Service, almost double the 25.8 million-tonne level in 2004-2005. Increased Chinese buying may support prices that have fallen about 13% this year on expectations of record global oilseed harvests.

"The country's soy consumption is likely to continue to rise by 7-9% a year with the pace of urbanisation," Dong Shuzhi, assistant general manager at Jinshi Futures Co., said.

About half of Chinese now live in urban areas, up from about a fifth in the early 1980s, as the country's export industries seek workers for factories, Laney said.

Urban inhabitants are wealthier and eat better, he said. Their diet has more meat and protein based on the raising of animals using soy in feed, he said.

US is the biggest supplier of soy to China, with a 45% market share in the 2008-2009 marketing year, followed by Brazil with 39% and Argentina's 14%, according to a February report from the US Embassy in Beijing.

Laney's estimate was for the marketing year beginning September 1, 2010. China's soy imports in the first five months of the calendar year have gained 13% to 19.6 million tonnes, according to customs data. Soy futures for November delivery gained 0.2% to US$9.135 a bushel on the CBOT at 1:12 p.m. in Shanghai.

Soy was the top US export to China in 2009, with the value of shipments jumping 26% to US$9.21 billion, according to figures from the US International Trade Commission.

Shipments through April this year have climbed 14% to US$3.3 billion.