Chinese soybean imports will prove more buoyant than had been expected this season, with palm oil buy-ins to avoid a 17-year low, but volumes will fall short of expectations for 2022-23, US officials said.
China will import 94.0m tonnes of soybeans and 5.0m tonnes of palm oil in 2021-22, as ends in September, the US Department of Agriculture’s Beijing bureau said.
Both figures, while below the bureau’s earlier hopes, remained above official USDA figures of 92.0m tonnes for soybeans, a three-year low, and 4.5m tonnes for palm oil – a figure which would be the weakest since 2004-05.
Although China’s palm oil imports had slumped by 43% to 2.6m tonnes in the first eight months of this season, sapped by strong market values, “demand is expected to recover in the second half of 2022” following the removal by top exporter Indonesia of trade curbs.
“Prices sharply declined in June following Indonesia’s reopening for exports and suspension of export levies,” the bureau said.
Soyoil vs palm oil
However, for 2022-23, China’s palm oil imports will, while recovering to 6.90m tonnes, come in below the 7.20m-tonne figure that the USDA has officially pencilled in.
“Home and food service use of palm oil will likely be constrained by greater demand for, and adequate supply of, soybean and other vegetable oils,” the bureau said.
This will reflect in part a stronger domestic 2022 soybean harvest, seen rising by 2.0m tonnes year on year to 18.40m tonnes, “driven by higher planted area as local producers respond to government incentives and price supports intended to boost soybean production”.
“The area expansion predominantly comes from farmers switching from corn (and to a lesser degree, rice) to soybeans.”
The increased soybean crop will also curtail imports, seen in 2022-23 at 98.0m tonnes, 1.0m tonnes short of the official USDA forecast, albeit still enough by a distance to keep China as the top buyer of the oilseed.
“Higher domestic production is expected to cut into imports,” the bureau said, saying that some of the home-grown supplies “will enter crushing channels in the north east and compete directly with imported soybeans”.
For corn, the bureau pegged 2021-22 imports at 24.0m tonnes, 1.0m tonnes above the official USDA forecast.
“In April alone, China purchased 4.5m tonnes of US corn, with more than 2.6m tonnes for 2021-22 and close to 2m tonnes for 2022-23.”
The bureau reported too some decline in prices, saying that “the after-tax landed prices of US corn to southern Chinese ports returned to around 3,000 renminbi per tonne in June from 3,200 renminbi per tonne in May”.
It added that “with food security as a policy priority, the government has shown its willingness to utilise multiple tools to stabilise grain prices and increase stock levels”.