July 14, 2022

 

China's soybean imports in June 23% down year-on-year due to weak demand

 


China's General Administration of Customs data showed soybean imports in June dropped 23% down year-on-year to 8.25 million tonnes due to weak demand and soaring global prices, Reuters reported.

 

In May, China imported 9.67 million tonnes of soybean, which was higher than June.

 

Brazil, China's top supplier of soybeans, saw production and exports suffer this year as a result of bad weather, and the world's largest consumer also saw significantly less demand than in the previous year.

 

In June 2021, soybean arrivals reached their third-highest level ever.

 

Most of the first half of the year saw significant losses for swine farmers, who have since reduced herd sizes.

 

Darin Friedrichs, co-founder of Shanghai-based agriculture consultancy Sitonia Consulting, said shipments from Brazil started to slow down in April and May as buyers watched the decline in crush margins.

 

When forward margins are negative, importers just buy what they need and don't want to accumulate large stocks, he said, adding that crushing margins are relatively low.

 

Since mid-April, China's crush margins have been declining, with crushers in Rizhao, a crucial hub for the northern soybean processing of Shandong, currently losing CNY 692 (~$103; CNY 1 = US$0.15) for every tonne of processed oilseed.

 

Buyers of soybeans crush the beans to produce soymeal and oil for cooking.

 

A China-based soybean trader who did not want to be identified, said despite a recent rise in hog prices that is increasing farming profits, demand for soymeal won't improve until swine inventories start to rise once more.

 

Recent price drops in edible oil have further reduced profits.

 

The trader said local crushers have stopped buying for the time being because it's very difficult to turn a profit.

 

The data showed that China imported 46.28 million tonnes of the oilseed in the first half of 2022, a decrease of 5.4% from the same period in 2021.

 

-      Reuters

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