China soy imports set to rise in next few years

China's soy imports are set to rise substantially in the next few years, an executive at commodities trader Noble Group said on Thursday (Sep 24).

Jaime Teke, global head of structured finance at the firm, which this week agreed an US$850-million equity investment from Chinese sovereign wealth fund China Investment Corp (CIC), said China had little room to increase its own soy crop.

Teke said that one of the big problems is irrigation, adding that imports of soy from Brazil and Argentina will rise substantially.

He said Noble has two soy crushing plants with 3 million tonnes of capacity in China, around 12 percent of the market.

Despite the deal with China Investment Corp, which now holds 14.5 percent of the trading company, Noble is not yet planning to expand its soy business in China, the world's biggest importer of the crop.

This year, China is expected to import about 40 million tonnes of soy, mainly from the US, Brazil and Argentina. The volume of imports dwarfs China's own harvest of around 15 million tonnes.

Meanwhile, the Singapore-listed firm rose as much as 13 percent on Thursday, in its first day of trade after a week-long suspension.

Noble, based in Hong Kong, announced on Tuesday (Sep 22) that CIC would buy a 14.5-percent stake for US$850 million.

OCBC Securities Lee Wen Ching said CIC's investment would cement Noble's presence in China, where tremendous growth potential exists, and provides the firm with funds for more investment opportunities.