August 12, 2011

 

 

China is likely to step up soy purchases in the international market amid widening crushing margins and the recovery of the country's hog production.

 

In July, the country's soy imports hit 5.35 million tonnes, an eight-month high and a rise of 24.4% from the previous month, according to data released by the General Administration of Customs on August 10.

 

Total imports in the first seven months of 2011 declined by 5.5% to 29 million tonnes on-year. "Soyoil producers will purchase more imported beans because they have been able to raise prices and increase their profit margins," analysts said.

 

The government has recently relaxed pricing regulations, which were imposed on a number of key producers of edible oil in November. They were ordered to keep prices unchanged to ease inflationary pressure.

 

At the same time, the rising shipments showed the recovery of hog production has bolstered demand for soymeal, a residue of soyoil production and a major source of animal feed.

 

"Driven by growing demand, a change in dietary structures and several other factors, China's imports of soy will maintain an upward trend for the next 10 to 15 years," experts said.

 

China is the world's largest soy importer, but has a self-sufficiency rate of 22%. In 2010, soy imports hit an historic high of 54.8 million tonnes, compared with 15.2 million tonnes of domestic production, the General Administration of Customs data showed.

 

Nevertheless, the area devoted to the growing of soy is shrinking. The soy acreage for the 2011 autumn harvest has declined by 930,000 hectares from last year to 7.6 million hectares, according to a report by the National Development and Reform Commission.

 

However, analysts said greater imports of soy will make China more susceptible to price fluctuations in the international food market. "If soy imports continue to grow and unfavourable weather occurs, China may suffer from international speculation and the ensuing food-price fluctuations in the global market,"

 

An increase in soy imports over the long term is inevitable, experts said.