China’s October soybean imports slide to lowest in eight years

Imports of soybeans fell 19% in October from a year earlier to 4.14 million tonnes in China, customs data showed on Monday, hitting their lowest for any month since 2014, after buyers cut purchases amid high global prices and poor crush margins.

Imports by the world’s top buyer of the oilseed were 73.18 million tonnes for the first 10 months of the year, down 7.4% from last year, data from the General Administration of Customs showed.

The very low shipments, matching the October 2014 figure of 4.1 million tonnes, underline an urgent need to rebuild stockpiles.

“Crush margins have been bad most of this year which has weighed on imports,” said Darin Friedrichs, co-founder of Shanghai-based consultancy Sitonia Consulting.

Global soybean prices hit a decade-high in June as bad weather cut production in Brazil, China’s top supplier.

The high prices and lacklustre demand for animal feed from the livestock sector during the first half of the year eroded crushing profits, blunting appetite for soybean purchases over the summer.

Crush margins in the soybean crushing hub of Rizhao were negative from late April until October.

The October arrivals were, however, even lower than the 5 million tonnes that traders and analysts had predicted last month.

See below the volume of soybeans exported from Brazil to China between January 2021 and September 2022, according to Datamar’s market intelligence service DataLiner.

Brazilian soybean exports to China | Jan 2021 – Sep 2022 | WTMT

Source: DataLiner (click here to request a demo)

The situation has left China short of supplies now that hog profits have recovered and boosted demand for the key protein ingredient, soymeal. Soybeans are crushed to make soymeal for animals and oil for cooking.

Cash soymeal prices touched records in recent weeks on tight supply. In the top hog-raising province of Sichuan, prices reached 5,850 yuan ($810.78) a tonne last week, up 26% in two months.

“Imports should pick up in November and December, but for right now, the market faces a very tight soybean supply situation,” said Sitonia Consulting’s Friedrichs.

Source: Reuters

To read the full original article, please go to: https://www.reuters.com/article/china-economy-trade-soybeans-idUSKBN2RX06W

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