China may import more soybeans than projected by the U.S. government next year as price declines and curbs on an alternative feed material spur purchases, according to the biggest local buyer.
Inbound shipments may climb to as much as 78 million metric tons in the year starting Oct. 1, exceeding 73 million tons estimated last month by the U.S. Department of Agriculture, Shao Guorui, chairman of Shandong Sunrise Grain and Oil Trading Ltd., said in an Aug. 1 interview. Imports were 69 million tons the previous year, USDA data show.
Stronger demand from the largest consumer may help stem a plunge in prices in Chicago, which touched a three-year low amid forecasts for a record global output. World inventory of the main protein ingredient may be smaller than an all-time high of 85 million tons projected by the USDA, Shao said.
“China’s huge appetite for soybeans has already been underestimated before,” Shao said from Rizhao in the eastern province of Shandong. “Now with the price of soybean meal being so much cheaper, people are going to use it like there’s no tomorrow.”
Sunrise will import 13 million tons in 2014, compared with about 11 million tons in 2013, according to an annual report by parent Shandong Sunrise Group Co.
Soybeans for November delivery on the Chicago Board of Trade were little changed at $10.6475 a bushel by 2:41 p.m. in Beijing, down 18 percent this year. Prices touched $10.54 on Aug. 4, the lowest since October 2010. Soybean meal in Dalian was at 3,282 yuan a ton, down 15 percent since June.
“Lower prices of soybeans may stoke more purchases, especially by those who buy the commodity to raise financing,” Wang Lin, managing director at COFCO Futures Co., said in an Aug. 2 interview. Soybeans are among the raw materials that are used as collateral to get credit, a broader practice in China known as commodity financing.
China’s imports may rise to 73 million tons in the year beginning Oct. 1. as demand for animal feed rises and falling prices boost processing margins, according to a Bloomberg News survey last month. COFCO’s Wang forecast them at about 75 million tons.
Consumption by China, which the USDA estimates buys more than 60 percent of the world’s traded soybeans, may also be boosted by its new restrictions on imports of U.S. dried distillers’ grains, a feed ingredient made from corn, Shao said.
The Chinese government in June suspended issuing permits to import DDGS as they are deemed at a high risk of containing the unapproved, genetically modified MIR 162 strain.
China has required the U.S. to guarantee shipments are free of the variety, the U.S. Grains Council said July 25. The requirement effectively halted the trade in Shandong, where Sunrise is based, Shao said. Before the ban, the country was forecast to import more than 5 million tons of the material this year, according to COFCO Futures.
Sunrise sells soybeans to state-owned crusher COFCO Corp. and global grain processors such as Bunge Ltd. and Wilmar International Ltd., according to Shao.
(Source – http://www.blackseagrain.net/novosti/china2019s-soy-imports-seen-by-sunrise-topping-usda-estimate)