China ramps up soybean purchases in August but Brazilian supplies tipped to tighten
National soymeal stocks down from July record high as US-China trade war rolls on
China imported 9.15 million tonnes of soybeans in August, up 14 per cent from July, customs data showed on Saturday, as buyers in the world’s top importer continued to buy from Brazil after Beijing imposed tariffs on US shipments.
August figures were up from last year’s 8.44 million tonnes.
“The market continues to buy Brazilian soybeans. But there is only a certain number of soybeans out there, and inventories here [China] are high,” said Tian Hao, senior analyst with First Futures, speaking before the August data was released.
Beijing imposed a 25 per cent tariff on a list of US products totalling US$34 billion in value, including soybeans, on July 6, in response to US penalties on Chinese goods worth the same amount.
Soybeans, crushed to make cooking oil and the protein-rich animal feed ingredient soymeal, were the biggest US agriculture export to China last year at a value of US$12.3 billion, according to the US Department of Agriculture.
Chinese buyers had already been heavily purchasing soybeans from Brazil before Beijing’s hefty taxes on US cargoes took effect, on worries that supplies will tighten up and prices will rise in the fourth quarter.
In July, the buying spree ebbed after China’s national soybean and soymeal stocks climbed to a record. China’s national soymeal stocks were at 1.18 million tonnes this week, slightly down from the record high level in July at 1.27 million tonnes.
For the first eight months of the year, China brought in 62 million tonnes of soybeans, down 2.1 per cent on the same period a year earlier, according to official data released by the General Administration of Customs on Saturday.
Imports in the coming months before November should be over 7 million tonnes per month, but supplies might tighten afterwards, as Brazil’s soybean season neared its end, analysts said.
Some see shortages further ahead. China might run out of soybeans in early 2019, an executive from a top state-owned crusher said this week, as imports of the oilseed from the United States were expected to grind to a halt after January.
China, which imports 60 per cent of the soybeans traded worldwide, bought 32.9 million tonnes from the United States in 2017, accounting for 34 per cent of its total purchases.