Chinese soy stocks starting to build up again after record lows in March

According to a report published by Reuters, Chinese buyers imported Brazilian soybeans for crushing and transformation into feed for the agricultural sector and cooking oil, but rains in late February in Brazil delayed the harvest and thus exports.  This caused stocks of soy and soy meal in China to fall to record lows, forcing some processors to stop operations. With weather conditions improving, however, shipments from Brazil are expected to arrive in Chinese ports in large volumes in the coming weeks.

“Most of the (soy crushing) plants in Guandong and Guangxi have resumed operations in the past few days,” says the manager of a unit in the south of the country. “Now the processors here are mainly fulfilling contracts signed previously and base contracts. The physical supply of bran is still tight, which should ease in the next week ”, he adds.

National soy stocks in China, however, are still quite low although they recovered from the record low reached in late March, reaching 3.67 million tons on April 13. Weekly soy stocks at Guandong, a crushing pole in southern China, increased to 488,000 tons –  almost double the level on March 23.  “The grains are arriving gradually. But there is a lot of soy meal (orders) that have yet to be delivered. Supply will be tight for some time,” said Shanghai JC Intelligence analyst Monica Tu.

Brazil shipped 12.6 million tons of soybeans in March, an increase of 35% compared to March last year. At least 61% of these exports went to China, according to data from Refinitiv. The following chart shows Brazilian soy exports to China and the rest of the world as of January 2015:

Chart source: DataLiner

Source of report: Reuters

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