June 4, 2009

China may considerably reduce its soy imports in the next four months which could sharply weaken global soy prices, Hamburg-based oilseeds analysts Oil World forecasted on Tuesday (June 2).

It said the current high prices for old crop soy on the world market is likely to push the Chinese government to sell its record stocks of domestic soy accumulated so far this season.

It added that the decline in Chinese imports could be more significant once the decision is taken to reduce the available inventories of domestic and imported soy and replenish them with new crop supplies from October onward.

Meanwhile, Oil World also forecasted a sharp increase in the US soy production this autumn which could further weaken prices and encourage importers to delay their procurement.

If such a situation occurs, there could be a sharp decline of between 10 to 15 percent in soy prices.