February 22, 2012

China's soy imports to climb 14%

From January to March 2012, China will import 14% more soy than the previous year due to lesser oilseed production and rising demand, Hamburg- based Oil World said.

The Asian nation will import 12.5 million tonnes of soy from January through March this year, the oilseed researcher said in a report. Shipments to China tota;led 4.12 million tonnes in January, up from 3.77 million tonnes in December, according to the report. Soy exporters in the US, expected to be the second-biggest shipper behind Brazil in 2011-12, sold 2.923 million tonnes to China in the biggest one-day deal on record, the USDA said February 17.

"China has stepped up purchases of US soybeans and will have to do more in the weeks and months ahead," Oil World said. "Due to the severe crop losses in South America, China has become more dependent on US soybeans. In China, declining oilseed production and rising demand have further widened the production deficit, which must be filled with higher imports."

Soy futures have gained 6% this year, partly on speculation that demand from China will increase and as dry weather has cut South American production.

China said on February 15 it would buy 8.62 million tonnes of soy valued at US$4.3 billion from the US. Chinese importers COFCO and the Chinese National Grain Corporation bought oilseeds from Bunge (BG) Ltd., Archer-Daniels-Midland (ADM) Co. and Cargill Inc., Oil World said. More sales may be announced as China is planning for deals to total 12 million tonnes, the researcher said.

"Additional agreements are likely to be signed soon," Oil World said. "Our latest analysis confirms that Chinese soybean imports are going to rise sizably and a further increase is likely to occur in April through September."