August 9, 2013

 

 

Even as data showed purchases showing a late surge in 2012-13, hitting a record high last month, US farm officials urged caution over expectations for a big rise in Chinese soy imports next season.

 

Chinese soy import hit 7.2 million tonnes last month, up 23% on-year, and beating the previous record of 6.93 million tonnes set in June, customs data showed.

 

Imports had been expected to prove strong, after a spring slowdown in buy-ins, in part thanks to logistical hiccups in Brazil, the main source of China's soy purchases.

 

Oil World expected China's soy inventories to hit a four-year low of 8.0 million tonnes last month. However, the extent of July imports beat expectations of many analysts, including Oil World, which had forecast a 7.0 million-tonne figure.

 

The data - which also coincide with a sharp drop in soy prices, on expectations for a strong US harvest - boosted hopes that Chinese soy in the 2012-13 year, which ends in September, might not after all fall to 59.0 million tonnes that the USDA has forecast.

 

While only a small decline, of some 230,000 tonnes, a decline would be significant in representing the first drop in purchases by the top importing country in a decade.

 

China's official China National Grain and Oils Information Centre (CNGOIC) crop bureau has forecast shipments hitting 6.04 million tonnes this month, a rise of 27% on-year, the USDA's Beijing bureau overnight forecast that shipments would hit 10.5 million tonnes over August and September.

 

The bureau restated a forecast of Chinese imports of 59.5 million tonnes in 2012-13. However, the bureau remained less upbeat on prospects for 2013-14 imports, restating a forecast of 67.5 million tonnes, 1.5 million tonnes below the USDA's official estimate, which a number of analysts have questioned as too optimistic.

 

"Some industry sources suggest a more conservative level of imports for 2013-14 of 63 million-65 million tonnes is appropriate given excessive domestic crush capacity of 130 million-140 million tonnes in 2013, with declining utilisation rates further cutting crush margins," the bureau said.

 

The setback to demand for meat from food scares including the avian flu outbreak and the discovery of scores of dead pigs in the Yangtze River has left "some industry experts forecasting a 3-5% decline in China's feed production in 2013 from the previous year".

 

The comments came in a report which added rapeseed production statistics to the list of official data which analysts suspect are being inflated, with concerns particularly over a subsidy scheme which rewards regional authorities by production.

 

While the CNGOIC has, based on National Statistics Bureau data, forecast China's 2013-14 rapeseed output at 14.4 million tonnes, private estimates vary from 9.4 million-13.5 million tonnes, the bureau said.

 

"Official data remains controversial among industry circles. In general, industry sources believe the official data has been high in recent years, arguing that strong imports of rapeseed products support a production level lower than that reported in the official data."