December 8, 2010

China's Q4 soy imports to jump 40%

Soy imports by China may rise about 40% in the fourth quarter and world consumption of products made from oilseeds has increased too quickly, resulting in diminished inventories, according to an Oil World report.

China's soy imports may top 14.2 million tonnes from October through December, up by four million tonnes from a year earlier, Oil World said. Stockpiles have been eroded "too rapidly," resulting in higher prices for soy, rapeseed and sunseeds. Dry weather in South America will hurt crops and reduce production, it added.

"The market is realising that consumption of oilseeds and products has increased too much in recent months," Oil World said. "The safety net is thus shrinking too fast, particularly considering the high risk of damage to crops in South America from dryness. Some rainfall is forecast for the affected areas, but an end to the dry spell in southern Brazil and central Argentina is not yet in sight."

Soy futures on the Chicago Board of Trade have gained 24% this year on rising demand. China is expected to import 57 million tonnes of soy in the marketing year that started on October 1, up 13% from a year earlier, USDA data show. Global consumption may rise 6.8%, according to the USDA.