Meat consumption in China, the world’s largest, will continue to expand even as the economy slows, sustaining demand for feeds made from corn and soybeans, according to Cargill Inc., the biggest U.S. agricultural company.
“We are looking at a mega-trend of increasing consumption of meat, milk, eggs,” Christopher Langholz, president of Cargill Animal Protein China, said in an interview, without giving specific forecasts.
Rising incomes in China, the second-largest economy, have increased demand for meat including pork, making the nation the largest buyer of soybeans, which are crushed to feed pigs and chicken. Soybeans and corn surged to records in Chicago last month as the worst U.S. drought in half a century cut supplies.
“China has been very transparent in soybeans, so the market can respond,” Langholz said. The transparency allows exporters to increase their ability to produce, reducing price volatility over time, he said.
While slower economic growth in China has hurt commodities from copper to iron ore, prospects for sustained soybean export demand have helped the oilseed to rally. China may increase soybean imports in 2012-2013 even amid record prices, Rabobank International said in July.
Soybeans rallied 45 percent this year on the Chicago Board of Trade, reaching a record $17.7125 a bushel on Aug. 30, while soybean meal in Chicago has also climbed to an all-time high. Soybean meal for January delivery on the Dalian Commodity Exchange jumped as much as 3 percent to 4,361 yuan ($687) a metric ton, the highest-ever price for the most-active contract.
China’s meat demand will rise 3.6 percent to 71.1 million tons in 2012 from a year earlier, and 73 percent of that will be pork, according to the U.S. Department of Agriculture. That may help push up soybean imports 3.5 percent to a record 59.5 million tons in the year from October, the USDA predicts.
The Asian nation, whose soybean imports jumped fivefold in the past decade, increased purchases of the new U.S. crop beans by 26 percent compared with last year, buying 11.2 million tons as of Aug. 23 even before the oilseed is harvested.
China’s economy grew 7.6 percent in the second quarter, the slowest pace in three years. Copper in London has lost 14 percent over the past 12 months, while iron ore delivered to China’s Tianjin has slumped to the lowest level since 2009.
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