September 11, 2012

China soy imports at lowest monthly level for August 2012

China's soy imports reached 4.42 million tonnes in August 2012, the lowest monthly level in six months, as rising prices and falling global supplies affect demand in the country.

The August import figure was 25% lower than July, when imports hit a 25-month high of 5.87 million tonnes, as crushers boosted their intake to meet strong demand for animal feed.

Drought in Brazil and Argentina reduced soy supplies from these key exporters and now fears of a reduction of US soy supplies due to drought have forced some Chinese crushers to swallow high prices and book expensive US soy cargoes.

Global soy prices have risen more than 45% so far this year. Concerns about supply also pushed the most-active Dalian soymeal futures contract to a record high, while soy oil was also trading at a year-high.

Chinese soy crushers have booked only 11 million tonnes, less than half of their needs for the period from September to February, the peak sales season for US crops.

"The crushing industry is now digesting stocks. Imports from September will be even lower than August," said one industry analyst.

"Soy demand in the third quarter was very good. Hog breeders kept their hogs due to low pork prices. Meal demand in the fourth quarter may not keep the same momentum as a recent rebound of pork prices have led to slaughtering of hogs," said another analyst.

The China National Grain and Oils Information Centre projected soy imports in September at 4.15 million tonnes, almost flat compared to the same month a year ago.

The centre expected September-to-December imports from Brazil and Argentina would be reduced by half from the year-ago period of 8.2 million tonnes.

It estimated that October imports would be about three million tonnes, while November imports were pegged at around 3.5 million tonnes. Both numbers are lower than a year ago at 3.8 million tonnes and 5.696 million tonnes, respectively.