Bloomberg News

China’s Soybean Imports in 2011 May Decline, Shanghai JC Says

November 25, 2011

Nov. 25 (Bloomberg) -- China’s soybean imports, the world’s biggest, may decline in the year through Dec. 31 as losses from processing the oilseed discourage additional purchases, Shanghai JC Intelligence Co. said.

Imports in November and December may be 5 million metric tons and 5.4 million tons, respectively, Monica Tu, analyst at Shanghai JC Intelligence Co. said Nov. 23. That would make this year’s total 52.4 million tons, less than last year’s 54.8 million tons and mark a first decrease since at least 2004, according to Bloomberg calculations based on available customs data.

Reduced demand for soybean oil and smaller inventory of hogs in China have hurt prices of processed soybean products, making returns on crushing a net loss as much as $57 per ton this month, Shanghai JC’s data show. China’s smaller demand helped contribute to a 20 percent loss in the oilseed this year.

“The market has little interest in more purchases” given the current pricing, Tu said by phone from Shanghai, maintaining a forecast for imports of the 2011-2012 marketing year that began Oct. 1 at 56.5 million tons, which is the same as estimated by the U.S. Department of Agriculture. Other than those shipments already booked, crushers have little incentive to make spot purchases, Tu said.

By comparison, in a Nov. 13 agricultural forum in Guangzhou, traders including James Zhou of Cargill Investment (China) Ltd. and Larry Li of Noble Group Ltd. forecast 58 million tons and 61 million tons, according to a transcript of the speeches posted on the Dalian Commodity Exchange.

“Those traders make estimates assuming the government will again buy a few million tons of domestic crops, in effect taking out local supply and boosting the need for imports,” Tu said. “But the government hasn’t announced its plan and I’m skeptical they will buy much given their strict quality standards.”

State reserves still have 4 million to 5 million tons of domestic beans harvested in 2008, and they have to be sold in the first half next year, which may counter any bullish effects from stockpiling, Tu said.

--William Bi. Editors: Richard Dobson, Jarrett Banks

To contact Bloomberg News staff for this story: William Bi in Beijing at wbi@bloomberg.net

To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net


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