November 15, 2011

China's soy imports for 2011-12 will likely reach 58-61 million tonnes, supported by strong demand for feedmeal and dwindling state reserves that need to be restocked, traders said.

China may import 58.5 million tonnes in the year that began October 1, said Fei Zhonghai, deputy general manager of COFCO Agri-Trading & Logistics, a unit of China's state-owned grain trader, COFCO Corp.

"Next year [2012] will be a good year for livestock raising; hog stocks will see significant increase, which will boost demand for protein meal," Fei said.

Zhou Xuejun, director of Trading and Risk Management for Cargill Investment (China) Ltd, pegged imports at 58 million tonnes. Li Chaoyang, trading head of Noble Trading Shanghai Co, expects the figure to touch 61 million tonnes.

In addition to higher demand for soymeal and stockpiling, newly-added crushing capacity will lead to more fresh soy purchases, Zhou said.

Noble's Li, who is more bullish about Chinese demand, said the government will likely buy soy now at low prices for stockpiling to prepare for possible price surges in 2012.

Soymeal demand will likely rise more than 8% this year, Li said.

To cool inflation, China released 2.6 million tonnes of domestic soy and 2.1 million tonnes of edible oils in 2010-11, government data showed.

The USDA has estimated 2011-12 imports at 56.5 million tonnes.

China imported 52.34 million tonnes in 2010-11, up 4% from a year earlier, the slowest growth in three years, customs figures showed.