March 19, 2025

 

China set for record soybean imports amid supply shortages

China is expected to import a record volume of soybeans in the second quarter, following supply tightness caused by delayed Brazilian shipments and slower customs clearances.

 

Traders and analysts estimate that soybean imports will reach 31.3 million metric tonnes between April and June, a figure based on forecasts from five research and trading firms.

This represents an increase of approximately 4.6% from the 29.91 million tonnes imported during the same period last year. The rise is attributed to the arrival of newly harvested soybeans from Brazil's bumper crop, which has drawn strong demand from Chinese buyers.

 

Cheang Kang Wei, assistant vice president at StoneX in Singapore, noted that Brazilian new crop soybeans are currently priced more attractively than other alternatives, leading Chinese crushers to purchase large volumes from South America.

 

The recent supply squeeze in China is linked to a combination of factors, including buyers avoiding US soybeans amid trade tensions and delays in Brazil's harvest. Last week, Beijing responded to new US tariffs by increasing duties on US$21 billion worth of agricultural products, including soybeans.

 

Liu Jinlu, an agricultural researcher at Guoyuan Futures, highlighted the widespread shortage, which has forced a growing number of soybean mills across China to suspend operations. March imports are expected to decline to 5.27 million tonnes, the lowest level in five years, according to StoneX.

 

In 2024, China imported a record 105 million tonnes of soybeans. However, high crush rates to meet livestock feed demand and stockpiling ahead of US President Donald Trump's January inauguration led to a reduction in inventories.

 

Data from consultancy Mysteel indicates that soybean stocks at Chinese ports had fallen to 4 million tonnes by March 7, down 600,700 tonnes from the previous week and 892,500 tonnes lower than the same period last year. A Singapore-based oilseed trader noted that soymeal stocks are currently tight, which is reflected in prices, but the situation is expected to stabilise from April, putting pressure on soybean product prices.

 

The March soybean crush is projected at 5.84 million tonnes, marking a 10.1% decline from February and a 19.1% drop compared to the previous year. Tight supplies have pushed crush margins in Rizhao, a key processing hub, to over CNY 450 (US$62.19) per ton.

 

A slower pace of customs clearance has further contributed to the supply crunch. In recent years, China has intensified quality inspections on imported soybean cargoes, leading to longer clearing times. Some shipments now take between 20 and 25 days to be transported from port to crushing plants, compared to the typical 15-day timeframe, according to a trader based in China.

 

- Reuters