China’s soybean imports will fall short of US expectations both this season and next, despite a record performance in July, with the knock-on effect of “intensified supervision” of buy-ins to undermine trade.
The US Department of Agriculture bureau in Beijing estimated at 76m tonnes China’s soybean imports for 2014-15 on an October-to-September basis – a rise of 5.6m tonnes year on year, but 1m tonnes beneath the USDA’s official forecast.
The figure factors in a retreat in the pace of imports to 13m tonnes over August and September combined, compared with the record 9.5m tonnes brought in during July.
And while imports will increase next season, at 78m tonnes, they will fall short of the 79m tonnes that the USDA itself has factored in.
China is the world’s top soybean buyer, responsible for some two-thirds of world imports.
‘Industry insiders are doubtful’
The bureau said that its lower forecast for 2015-16 reflected the boost to inventories from the rise in imports this season.
“Most industry insiders are doubtful” that recent strong growth in imports “reflects the actual demand growth”, the bureau said in a report.
“The excessive soybean imports are expected to add carry-in stocks which will likely limit the net import growth in 2015-16.”
However, the report also noted the squeeze on Chinese imports of soybeans for food, amid local concerns that some genetically modified supplies were getting into the food chain, against domestic regulations.
“Recently, China’s regulatory agency intensified supervision of use of imported soybeans which is likely to reduce the use of imported soybeans for food processing.
“China’s policy specifies that imported GMO soybeans should strictly be crushed or used as feed ingredient.”
The China National Grain and Oils Information Centre, the state-run think tank, last month cautioned that some soybean buyers had suspended imports over GMO worries.
“Sales and distribution activities at Shandong ports have been suspended… which prevents any imported soy from flowing into the food sector,” the centre said, adding that this was a fillip to demand for domestic beans.
China consumes some 10m tonnes of soybeans as food, out of total domestic consumption estimated by the USDA for 2014-15 at 86.1m tonnes.
The comments come amid a broad market focus on China’s commodity imports, and the extent to which prospects for which have declined with reduced expectations for economic growth.
The International Grains Council two weeks ago, while itself estimating Chinese soybean imports in 2015-16 at 79.5m tonnes, said that “recent heightened worries about the country’s economic growth prospects mean that the outlook for import demand remains somewhat uncertain at this stage”.
However, prospects for many agricultural commodities have faced an extra threat from enhanced controls, with the likes of barley, distillers’ grains and sorghum this month joining the likes of rapeseed and soybeans on the list for which imports will be monitored under the so-called “automatic import licence” scheme.
China’s surging imports of feed grains have “triggered debate among all stakeholders on the purpose for the implementation of AIL to these commodities,” the USDA bureau said.
“Imports of these commodities could be somehow impacted or slowed in the short-term due to this policy uncertainty.”
The USDA itself, whose data set world benchmarks, will update its crop supply and demand estimates on Friday, in its monthly Wasde report.
(Source – http://www.agrimoney.com/news/us-officials-curtail-hopes-for-chinese-soybean-imports–8737.html)