December 9, 2004

 

 

China to Import 20 Million MT Soybeans in 2004-05

 

China is forecast to import 20 million metric tons of soybeans in 2004-05 and produce 18 million tons, according to US Department of Agriculture.

 

Production

 

On Nov 25, 2004, a recognized Chinese consultant publication estimated MY2004/5 production at 18 MMT, which is virtually unchanged compared to its end of October projection of 18.05 MMT. Both of these estimates are down from an earlier estimate of 18.8 MMT. The latest estimate is still greater than last year's production.

 

Four provinces registered increases: 1) Heilongjiang up by 1 MMT to 6.65 MMT; 2) Inner Mongolia up by 464 KMT to reach 1 MMT; 3) Henan up 567 KMT to 1 MMT; and, 4) Anhui up 19 KMT to 1.19 MMT. The growth in Heilongjiang can be attributed mainly to increased yield, which averaged at 1,900 kg/Ha, up by 245 kg/Ha or 15 percent more than the year before.

 

Some other sources' estimates, however, are as high as 18.8 MMT. Post's October estimate of 18 MMT remains unchanged.

 

Consumption

 

The same publication mentioned above estimates that domestic crushing use in MY04/05 would reach 28 MMT, and domestic soymeal production would hit 22.3 MMT, compared with 19.87 MMT for MY03/04. The subdued soy product market is currently a result of price uncertainty.

 

Mills reportedly expect further price drops for soymeal. In the longer term, however, total soybean demand for MY04/05 is expected to grown along with the increased demand for soymeal and soyoil.

 

Imports

 

Trade sources forecast soybean imports for MY04/05 will reach 19 MMT, chiefly due to continuing strong demand for soy products, especially soymeal, in addition to a relatively low ending stock for MY03/04. Some sources estimates range as high as 20 MMT. Post's import estimate for MY04/05 is 20 MMT or even higher. One source reported that China's total contracts for US soybeans reached 6.6 MMT as of Nov 18 of MY04/05.

 

This was 44 percent higher than the same period in previous year. Arrivals in the coming two months are expected exceed 2 MMT monthly. It is worth noting a bumper harvest of cotton  estimated at 6.3 MMT) will result in higher cottonseed meal and oil in market. It is estimated that cottonseed will grow by above 2 MMT relative to the year before.