China’s Soy Imports to Fall Short of Forecasts in 2014/15
China is responsible for buying 60% of the world’s soybean exports, making changes in its purchase volumes of particular importance to pricing. China’s soybean imports will increase at a lower rate this season than predicted because of pressure on soybean processors’ margins. After nine consecutive months of negative margins and losses of approximately US$3.25 billion, the industry is very cautious of over importing.
The U.S. Department of Agriculture (USDA) bureau in Beijing forecasts that China will import 73 million tons in 2014/15 – a 3.7% increase year on year and 1 million tons below the department’s official forecast.
Despite this slow down this season, the USDA bureau is predicting a stronger rebound in growth for 2015/16 with soybean imports rising 6.2%, and volumes reaching 77.5 million tons. This increase is flagged as being the result of an expected increase in domestic soymeal consumption of 58.78 million tons for animal feed use as China invests in modernizing and scaling up its animal production sector.
China’s domestic soybean production will be far short of meeting demand, falling 300,000 tons this year to a 23 year low of 11.7 million tons; restricted by low profits, flat-lined yields, subsidy reductions, and alternative crops offering higher profits.