January 17, 2021

2021 China soybean imports drop 3.8% due to slow demand and low margins

Data from China's General Administration of Customs (GACC) showed 2021 soybean imports dropped 3.8% compared to 2020, the first annual drop since 2018, Reuters reported.

China imported 95.62 million tonnes of soybean in 2021, compared to 100.33 million tonnes in 2020.

Zou Honglin, an analyst with the agriculture division of Mysteel, a China-based commodities consultancy, said demand for soybean has fallen to due to low swine margins and higher wheat feeding.

Zou said soybean crushers reduced purchases of the oilseed in the second half of 2021 because of worsening crush margins on increased import costs and low prices of domestic soymeal. Swine prices in China also fell and there is a rise in the use of wheat as swine feed.

Data from China's GACC showed December year-on-year imports increased, 18% higher at 8.87 million tonnes compared to 2020. The figures were also higher for November.

Darin Friedrichs, co-founder of agricultural research firm Sitonia Consulting, said imports in September and October were low as live hog prices dropped in the first half of 2021 and importers did not want to purchase soybeans as local feed demand was uncertain.

A drought in Brazil, China's largest soybean supplier, could cut output of the oilseed this season compared to past estimates as average yields are set to hit a six year low.

-      Reuters