August 11, 2010

China's July soy imports dip amid high stockpiles

China's soy imports in July fell for the first time in five months as high inventories at ports and reduced crushing margins led to lower shipments by the world's largest buyer.

Imports were 4.95 million tonnes in July, compared with a record 6.2 million tonnes a month ago. Total shipments in the first seven months of this year rose 16% to 30.75 million tonnes, according to reports.

Four consecutive months of rising imports before July had led to ample inventories at ports while crushing margins were not ideal given the sluggish demand for animal feed and cooking oil, said Wu Qiujuan, analyst at Xinhu Futures Co.

Still, Chinese crushers may have bought at least 1.2 million tonnes of US soy last week, the most in weekly period this year, the China National Grain & Oils Information Centre said. Crushers will likely remain active buyers of US soy, it said.

"We expect imports to stay at four million to five million tonnes in August, which is still a substantial amount, we just won't see June's record to be repeated any time soon," Wu said.

Soybeans are crushed for their oil and also processed into meal, an ingredient in feed. China's soy imports account for more than half of global exports and are forecast at 48 million tonnes this year by the US Foreign Agricultural Service in its July report.

Some buyers turned to using imported soyoil again after the jump in soy imports in June, analysts said.