March 14, 2013

 

 

The USDA's Beijing bureau estimated Chinese soy imports at 65.5 million tonnes next season, equivalent to 1.25 million tonnes a week, and up 2.5 million tonnes on this season's total.

 

The pace of purchases by the world's largest soy buyer, which accounts for about two-thirds of world imports, will be supported in part by a decline in domestic production.

 

The bureau forecasts China's domestic harvest falling by 500,000 tonnes to 12.0 million tonnes - the weakest since 1992-93.

 

The harvest forecast reflects the greater profits available from alternative crops, with corn returns, estimated by Chinese officials in Heilongjiang Province this season, at 44% more than soy.

 

Elevated domestic demand was unlikely to see farmers switch back to the oilseed, "given soy' modest profit signals, lucrative alternative crops and land constraints".

 

Even for growers sticking with soy, "small-scale farm size, lack of agronomic techniques, such as soy crop rotation, and limited access to better inputs remain major impediments to yield increases".

 

Meanwhile, Chinese demand for soy continues to rise, supported by growing feed consumption, which is estimated to have risen by some 7% to 193 million tonnes last year.

 

"Continuing soy import growth is driven by strong demand from the crush industry to supplement domestic production," the bureau said.

 

Domestic soy crushing capacity is estimated to have risen by 10 million tonnes to 125 million tonnes during 2012.

 

However, the import figure is less than the 67.6 million tonnes forecast by the USDA last month in its so-called "baseline" report, giving long-term projections for crop dynamics, which forecast Chinese purchases, topping 100 million tonnes within the decade.

 

"China's modern, efficient, but under-utilised oilseed crushing capacity is expected to drive strong gains in soy imports," the baseline report said.

 

The bureau also forecast Chinese imports of US soy remaining below a high of 25.0 million tonnes reached in 2010-11, as Brazil increases its lead on supplies to the market.

 

Chinese purchases from the US in 2013-14 are estimated at 22.0 million tonnes.

 

China seems to be affected by problems in Brazil's logistics, due to prolonged waiting periods for departing ships there.