August 12, 2008


Slowdown seen in China's soy imports after July influx


China's soy imports rose 15.6 percent on-year to 3.5 million tonnes in July, the third-highest ever, and shipments could rise to a record in August on state purchases.


Chinese crushers had increased their bookings during these two months on expectations of strong meal demand from the pig breeding industry, traders said. Record soyoil prices earlier in the year also spurred buying.


The jump in imports has extended into the early part of August, when analysts estimate imports could reach a record 4 million tonnes partly helped by purchases for state reserves.


Traders say the imports over July and August would be excessive and some are already delaying or canceling September imports as the general soy influx led to falling domestic prices and a build-up of inventories.


After a sharp decline in February, China imported 3.58 million tonnes of soy in June, up 42 percent on-year.


Weak Chinese soyoil prices and a recent fall in soymeal prices have given pause to soy buying and they have also deferred some palmoil and soyoil cargoes.


Prices have fallen by 30 percent since early July, according to one trader.


Soy futures in Dalian Monday fell by their 5 percent daily limit, after CBOT soy futures fell to a four-month low last week on expectations of a larger crop.


Although imports are likely to slow for now, traders expect imports to continue growing next year despite expectation of a bumper domestic harvest.


China was likely to harvest 36.7 percent more soy this year at 17.5 million tonnes.

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