China 2011-12 soybean imports seen at 58 million tons

by Commodity Online

World’s largest soybean consumer China’s import of the commodity is projected to grow by nearly 6 percent during 2011-12, according to USDA.

China will buy in 58.0m tones of the oilseed in 2011-12, some 5.5% more than in the current season, reports Agrimoney quoting Beijing office of US Department of Agriculture said in a report.

Falling domestic crop and growing needs for animal feed will keep up China’s import of the commodity continued to spur up demand, the report said.

While representing a slowdown on the pace of growth in 2010-11, the figure would set a record, and keep the pressure on supplies from America, the top soybean exporter.

China's soybean imports from America would reach 27.0m tones (992m bushels) next season, a rise of 2.0m tones (73.5m bushels) – more than the US is currently expecting its production to rise by.

As an extra sign of the pressure facing US stocks, it is estimated that China would import 25.0m tones of American soybeans in 2010-11, a figure 1.0m tones higher than the official USDA estimate.

The upbeat estimates to the strong demand for both soybean products – soy oil, for which consumption is being directly boosted by Chinese consumers' growing wealth, and soybean meal, which is feeling the demand indirectly, through a growing appetite for meat.

The growing demand for meat is spurring the consolidation of livestock producers into industrial enterprises keener to buy soy meal than small-time farmers.

However, domestic farmers were to put less ground to soybeans this season, preferring grains, which attract greater levels of government support, and higher value horticultural crops.

In eastern Chinese provinces, such as Hebei and Shandong, "soybean planting areas is expected to lose ground to cotton and corn", and to fall 10% in neighboring Henan.

The report added that soybean growers' "competitiveness continues to be undercut by low yields and poor efficiency", with a lack of crop rotation believed to be keeping yields at a little over half US levels of 3 tons per hectare.

The report also proposed that China would not imminently lower tariffs on soybeans and soyoil from 9% to 3% - speculation over which lifted Chicago prices of both commodities last week – despite the help such a reduction might be in the battle against food price inflation.

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