May 9, 2014

Chinese soy imports hit the highest monthly level in April, soaring 63.5% from the same month in 2013, official customs data showed.

Imports by the world's biggest soy buyer stood at 6.5 million tonnes in April, up 41% from March's 4.62 million tonnes. Growth was aided by more imports from Brazil, China's top supplier, after port congestion last year delayed shipments.

In the first four months of 2014, the country's total imports reached 21.85 million tonnes, up 41.2% on a year earlier, said the General Administration of Customs.

"There are no logistics problems in Brazil, not like last year. We expect imports to slow down from June after buyers earlier cancelled cargoes over negative margins," said Li Lifeng, an analyst with industry portal www.cofeed.com.

Excessive imports coupled with poor crushing margins have led some buyers to try to cancel or default on cargoes. But a rebound in domestic soymeal prices has narrowed crusher losses to about RMB200 (US$32.08) for processing one tonne of beans into meal and edible oil. That compares with RMB300-400 (US$48-64) per tonne losses in the first quarter, analysts said.

The crushing margin should improve in two to three months, Bunge Ltd's chief executive officer has said.

"All the cargoes that Chinese importers booked aggressively in the past months are arriving now ... But this is creating a glut of beans in the domestic market ... From June onwards imports should start declining," said Vanessa Tan, analyst at Phillip Futures in Singapore.

Beijing's plan to start state soy sales from next week will add to the country's soy glut. The government will offer 300,000 tonnes of soy from state reserves.