September 11, 2009

China, the world's largest soy importer, is likely to reduce imports in 2009-2010 after a record estimated import of 40.6 million tonnes in the current year ending September, according to statistics from the China National Grain and Oils Information Centre (CNGOIC).

Despite Chinese crushers are likely to process more domestic soy into soymeal and soyoil, the domestic output is likely to drop six percent this year to 14.5 million tonnes, the centre said.

It added that Chinese soy plants are likely to process six million tonnes of domestic soy next year, higher than the 2.2 million tonnes forecasted for the current year.

China's record imports in the current year were driven largely by Beijing's stockpiling of domestic crops, which had set prices higher than import prices, prompting crushers in the north to shift to cheap imports.

Traders said China was considering improving its stockpiling scheme on the new harvest in a bid to encourage plants to crush more domestic soy.

The centre's soy import estimate were in line with the forecast by the US Department of Agriculture (USDA) which put China's imports at 38.1 million tonnes for the 2009/2010 marketing year.

China's soy imports in November and December of this year would rise to more than four million tonnes each month following low imports in September and October, which were estimated at 2.6 million tonnes and two million tonnes respectively.

In addition, the centre also estimated China's soyoil consumption to grow 11 percent to 9.1 million tonnes in the year beginning October, including 2.3 million tonnes of imports. Soymeal use for feed production was projected to rise 8.3 percent to 32.5 million tonnes as farmers increased their livestock inventories amid rising breeding margins.

Meanwhile, soymeal exports would fall to 800,000 tonnes in 2009/2010 from the 1.15 million tonnes estimated for the current year.