November 13, 2010

 

Sharp decline in October China soy imports

 

 

China's imports of soy registered an unexpectedly sharp decline in October, however, a monthly decline is unlikely to affect the domestic market, analysts said on Wednesday (Nov 10).

 

Imports of soy dropped 19.6% from September to 3.73 million tonnes in October, the second lowest this year after February's total of 2.95 million tonnes.

 

Overall imports of soy for the first 10 months of the year jumped 25.8% to 43.9 million tonnes on-year, according to data released by the General Administration of Customs on Wednesday (Nov 10).

 

The forecast for soy imports in October was an estimated 4.15 million tonnes by the Ministry of Commerce, after officials adjusted the original projection of 3.22 million tonnes.

 

"Surging prices in the international food market may have played a major role in the drop in China's imports," said Hu Bingchuan, an assistant researcher at the Rural Development Institute of the Chinese Academy of Social Sciences.

 

During the first 10 months of this year, soy futures at CBOT peaked at US$427.18 per tonne in October, jumping from US$358.97 in January, an increase of 20%.

 

The October price was also the highest since August 2008. Propelled by surges in the international market, increases have also been seen in the domestic price of soy, vegetable oil and other agricultural commodities.

 

Soaring prices in the food market reduced revenues for domestic soy-processing companies, and may have prompted them to adjust their import policies.

 

Conversely, monthly fluctuations may also be the result of a cluster of market factors, which is quite natural and will have little influence on prices in the domestic market, Hu said.

 

An analyst echoed Hu's opinion, saying a monthly change need not necessarily lead to the reduction of China's soybean imports for the whole year.

 

"Meanwhile large amounts of soy imports are expected within the remaining two months of this year, which will help ease the price hikes in the domestic food market," the analyst said.

 

China is the largest global consumer of soy, but annual domestic production amounts only to one-third of its import volume. This year imports are expected to exceed 50 million tonnes.