China soybean imports fall 23% in June on weak demand

Soybean imports by China fell 23% in June year-on-year to 8.25 million tonnes, as high global prices and weak demand curbed oilseed consumption, customs data released on July 13 showed.

According to General Administration of Customs data, June soybean imports in China were lower than May’s 9.67 million tonnes.

Soybean prices have risen this year after bad weather hampered Brazilian production and exports, China’s leading supplier, while demand from the world’s biggest buyer is also significantly weaker than it was a year ago.

“One cannot compare the situation in 2022 to a year ago. It has completely changed,” says one soybean trader from China who did not wish to be identified.

Hog farmers faced heavy losses during much of the first half of the year and have been reducing the number of herds.

Shipments from Brazil began to slow in April and May as buyers saw crushing margins decline, said Darin Friedrichs, co-founder of Shanghai-based agricultural consultancy Sitonia Consulting.

See below the track record of Brazilian soybean shipments to China from January 2021 to May 2022. Data are from DataLiner.

Brazilian soy exports to China | January 2021 – May 2022 | WTMT

Source: DataLiner (click here to request a demo)

“Crush margins are relatively low, and importers are just buying what they need and don’t want to build up large inventories when future margins are negative,” he said.

Crush margins in China have been negative since mid-April, with crushers in Rizhao, northern Shandong’s central soybean processing hub, now losing 692 yuan ($103) with every tonne of processed oilseed.

Despite a surge in hog prices in recent weeks, which has boosted livestock profits, the trader says demand for soybean meal will not improve until hog inventories start to rise again.

The data showed that China brought in 46.28 million tonnes of the oilseed in the first six months of 2022, down 5.4% from the corresponding period a year earlier.

Source: Money Times

To read the full original article, please go to: https://www.moneytimes.com.br/importacoes-de-soja-pela-china-caem-23-em-junho-com-demanda-fraca/

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