November 6, 2023

 

China's soybean imports set to reach record high in 2023

 

China's soybean imports are expected to maintain their high levels throughout the fourth quarter, pushing the total for 2023 to a new all-time record, but lacklustre demand from unprofitable swine farms is anticipated to reduce purchases early in 2024, according to information from traders and analysts, Nasdaq reported.

 

Record supplies of Brazilian soybeans are set to dominate China's imports during the final three months of the year. The reason for this shift is the better quality of oil and meal provided by Brazilian soybeans, which diminishes demand for United States cargoes. China is the world's largest market for soybeans, and these changes are expected to put added pressure on benchmark Chicago futures, which have declined nearly 15% this year, breaking a four-year upward trend.

 

Zhang Liwei, chief engineer of China National Grain and Oil Information Centre, noted at an industry conference in Dalian that the sustained and rapid development of China's feed industry is keeping soybean imports at a high level.

 

China is the world's leading soybean importer, purchasing over 60% of the oilseed shipped globally for meal production and cooking oil.

 

Usually, fresh US soybeans dominate the global export market in September as the Brazilian export season winds down. But this year, China's purchases from the US have been significantly below the usual levels.

 

Forecasts by four trading sources indicate that China will import approximately 26 million metric tonnes during the final three months of the year, with approximately 45% of the volumes coming from Brazil.

 

For October, arrivals are estimated at 6.5 million metric tonnes, followed by 10 million metric tonnes in November and 9.5 million metric tonnes in December. This is according to a Shanghai-based trader affiliated with a global trading house. These import levels would bring China's total imports in 2023 to a record high of around 105 million metric tonnes, a 15% increase from the 91.1 million metric tonnes imported the previous year.

 

Despite the narrowing price spread between Brazilian and US soybeans due to the US harvest season, crushers still prefer Brazilian beans due to their superior oil and meal quality.

 

While fourth-quarter demand is supported by stable soymeal consumption for the country's large swine herd, procurement for early 2024 is expected to be lower as unprofitable livestock farmers reduce their purchases.

 

-      Nasdaq