October 22, 2010

China's soy, corn imports to soar next year

China is forecast to import a record volume of soy and to take more cargoes from the international corn market next year as domestic production fails to keep pace with surging demand.

The outlook for higher imports from the world's top soy buyer and second-largest corn consumer powered US soy futures to a new 14-month top on Thursday (Oct 14), while China's Dalian corn market hit a record.

China is likely to import 54 million tonnes of the oilseed in the year to September 2011 due to rising demand for vegetable oils and protein meal, the China National Grain and Oils Information Centre (CNGOIC) said.

With crushing margins hitting the highest levels of the year, Chinese soy processors are snapping up cargoes of the new crop from South America, with five million tonnes booked so far, or a quarter higher than last year.

South American soy cargoes for March shipment will offer a crushing profit of RMB211 (US$31) per tonne, and for July shipment the margin will be RMB302 (US$45)/tonne - the highest this year, or a rise of RMB200 (US$30) /tonne from the end of September, CNGOIC said.

By early October, sales of US soy have reached 23.3 million tonnes, or 56% of the USDA's full-year export projection. Nearly two-thirds of all sales to date from the US are heading to China.

Meanwhile, the nation is likely to see a corn supply deficit of as much as seven million tonnes, a leading industry analyst said Thursday, after sharply cutting his estimate of the coming year's harvest.

China's corn consumption is expected to grow to 160 million tonnes in the year to September 2011 from 155 million tonnes in 2009/2010, while production would only reach 153 million tonnes, he said.