China’s soybean imports have peaked

China’s soybean imports have peaked

September 29, 2020

Hellenic Shipping News reported on 8 September that China had the highest imports in August, according to customs data. China’s soybean imports were the highest. Thus, it imported 9.6 million mt of soybeans in August, up from 9.4 million mt in 2019, Chinese customs data showed on Sept. 7.

This increase in demand is due to the improving population and situation of pig herds in China. In 2018, it lost 50% of its pig population due to the swine fever. Now, as the situation improves, demand for soybeans from the United Stated and South America (Brazil) have increased. “In early June, Chinese agriculture ministry data indicated the eight consecutive months of sow inventory expansion and four months of growth in the hog herd, with a net growth of 38 million hog heads between the end of 2019 and May 2020,” the press said.

This amount of imports has caused the increase in world soybean prices, which has caused concern. Because China is one of the biggest importers of oil seeds. Therefore, it plays an important role in price changes. But this increase in demand and purchases of US beans supports the future of soy. High oil seed futures prices have also supported port loading prices.

Soybean is currently traded on the world market for $ 9.68. This is the highest level in the last 8 months. According to close sources, this demand may go even higher. The US Department of Agriculture announced that China’s imports in 2020 (October-September) will reach 99 million. Hellenic Shipping News also adds: “S&P Global Platts assessed SOYBEX FOB New Orleans for October loading at $396.46/ mt on Sept. 4, up 9% month on month.”

According to a Chinese analyst, importers have fully covered demand for October and November. They are currently trying to book its orders from the US for December and from the Brazil for March.

A Chinese consultant said that if Brazil cuts supply, China would continue to buy from the United States. Even with tensions between Washington and Beijing, soy purchase from the United States will continue in the fourth quarter of the year.

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