China's soy imports to drop to lowest since 2007

China, the world's biggest soy buyer, may import 1.8 million to 2 million tonnes in October, the fourth straight month of declines, according to state-backed China National Grain & Oils Information Centre.

 

Inbound shipments may decline from 2.8 million tonnes this month, said the centre. Imports of 1.8 million tonnes would be the lowest level since February 2007, according to Bloomberg data.

 

Soy in Chicago climbed to a nine-month high in June after stockpiling by China's government this year to boost state reserves and support local prices pushed imports to a record. Reserves remain high as auctions to reduce inventories before the domestic harvest failed to attract buyers.

 

Guo Tao, an analyst at China International Futures (Liaoning) Co. said the decline is expected because overseas prices were high and domestically harvested soy is coming in the markets in a few weeks.

 

China's imports of soy have dropped since hitting a record 4.7 million tonnes in June, according to Bloomberg data. Shipments in the first eight months reached 29.6 million tonnes, 21 percent higher than the year ago period, the data showed.

 

Shipments are expected to recover from the end of the year unless the government uses the oilseeds to retaliate against the US for the tire tariffs, Guo added, without elaborating.

 

Concern spread earlier this week that US tariffs imposed on tires from China will spark a retaliatory slowdown in purchases of US crops and farm products.

 

The US placed tariffs of 35 percent on tires from China last week, acting on a union complaint that imports were pushing workers out of jobs. China announced a probe into the alleged dumping of American auto and chicken products after the US actions. China is the biggest buyer of US soy and the second-biggest importer of poultry and pork.

 

Government auctions to sell off state reserves to make way for new crop domestic beans have failed to attract any significant buying. The most recent auction today sold only 15,500 tonnes of soy, or 3.1 percent of the about 500,000 tonnes on offer. The government may consider offering subsidies to crushers to buy the oilseed from local farmers, Li Qiang, chairman of Shanghai JC Intelligence Co., said Sept. 4.