Chinese soybean imports in August fall due to stable demand

Chinese soybean imports fell in August from the same month a year ago, customs data showed Tuesday, as low crush margins and high international bean prices weighed on demand.

China, the world’s largest buyer of soybeans, imported 9.49 million tonnes of oilseeds in August, down slightly from 9.6 million tonnes a year ago, according to data from the General Administration of customs.

Crushers increased their soybean purchases in the early months of the year in anticipation of strong demand from a rapidly recovering hog herd. More recently, however, shipments have slowed as falling pork prices reduced demand.

August imports rose 9.5% from 8.67 million tonnes in July, the data showed.

China’s soybean crush margins climbed from record highs in June, but still remain under pressure due to stagnant demand and the high cost of imports.

Chinese grinders bring soybeans to be ground into soybean meal to feed the huge livestock sector and provide cooking oil.

Crushers in Rizhao, Shandong Province, a major soybean processing hub in northern China, would lose about 80 yuan ($ 12.40) for every tonne of soybeans processed as of Monday.

China’s pork margins have fallen since the start of the year and have remained at low levels due to falling pork prices. Margins for Sichuan, one of the main Chinese producers, were negative by 200 yuan.

Chicago Board of Trade soybean prices, on the other hand, rose more than 30% from the previous year.

The demand for soybean meal typically increases in late August and September, as farmers fatten pigs to prepare for upcoming festivals and winter.

However, soybean shipments over the next few months are unlikely to increase as China built up large supplies earlier in the year, while margins on pork are expected to remain low, traders said.
Source: Reuters (Reporting by Hallie Gu and Shivani Singh; editing by Richard Pullin)

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