China’s soybean imports will recover by some 5m tonnes in 2022-23, US officials said, even as customs data showed volumes starting the season at their slowest for any month in eight years.
China – by far the biggest buyer of the oilseed – will in 2022-23, on an October-to-September basis, import 96.50m tonnes of soybeans, the US Department of Agriculture’s Beijing bureau said.
Growth from the 91.6m tonnes imported last season will be fuelled by expansion in demand for both soymeal, a key livestock ingredient, and soyoil, used in the main in cooking oil and food.
“Soybean oil use is… expected to increase on expected demand recovery due to lower soybean oil prices and limited supply of sunflower oil,” of which war-torn Ukraine is the top shipper, the bureau said.
Soymeal demand, meanwhile, will be “supported by improved profits for animal husbandry”, the bureau said, noting official Chinese data showing that the country’s combined output of beef, mutton, pork and poultry meat rose by 4.4% to 67.11m tonnes over the January-to-September period.
The briefing came shortly before Chinese customs data showed the country’s soybean imports last month tumbling by 19.0% year on year to 4.4m tonnes – the weakest total for any month since October 2014.
Imports fell by 56% month on month.
The figure was viewed as reflecting weak crush margins earlier in the year, in the face of elevated soybean prices, which in May topped $17 per bushel in Chicago for the first time in a decade, while China’s economy struggled against restrictions imposed to quell Covid.
However, a recovery in hog sector profitability, after a run-down in some breeding herds amid a long spell of low prices, spurred a surge in soymeal prices to record highs, in turn reviving soybean crush margins.
In China’s top pork-producing province of Sichuan, soymeal prices last week reached 5,850 yuan per tonne, up by more than one-quarter in two months.
Soyoil vs palm oil
The USDA bureau said that given the country’s tough anti-Covid policy “significant uncertainty remains in forecasting China’s demand for soybeans and other oilseed products”.
The bureau’s said that its forecast for 96.5m tonnes of Chinese soybean imports this season, which is below the USDA’s official estimate of 98.0m tonnes, reflected constraints from “higher domestic soybean production, ongoing sales of state reserve soybeans, and uncertainty due to Covid restrictions”.
However, the figure also factored in “higher demand for soymeal in the swine and poultry industry and vegetable oil demand for food sector use”.
Soyoil faces the threat of some substitution from rival palm oil, given relative prices.
“Industry is likely to resume blending palm oil with other oils given palm oil’s significant price advantage,” the bureau said.
Nonetheless, its forecast for Chinese palm oil imports this season, at a record 7.0m tonnes, if a figure 200,000 tonnes below the official USDA estimate.