BEIJING (Reuters) — Soy imports by China, the world’s top buyer, will surge 17 percent in the year ending September to a record of over 70 million tonnes, according to a forecast by an official think-tank issued on Wednesday.
Appetite for soy has been growing as the world’s second-largest economy expands, with farmers feeding products made from the grain to pigs and chickens.
The forecast by the China National Grain and Oils Information Centre (CNGOIC) is higher than an estimate of 69 million tonnes by the U.S. Department of Agriculture for the current year..
“The large increase in imports is being driven by sustainably strong domestic demand. Crushing capacity and volumes have been increasing constantly,” the centre said in a report.
The use of soy imports as collateral in financing deals has also boosted shipments, it said.
Beijing’s stockpiling of domestic soybeans has kept local soy prices high above imported prices, leading more inland crushers to shift to cheap imports.
A large volume of cheap imported soy has also been used in food processing, said the centre. It did not elaborate.
Beijing is set to scrap soy stockpiling in 2014, however.
Import growth is likely to slow in 2014-15, with total shipments seen up four percent at 73 million tonnes, the centre said. That is in line with USDA forecasts.
“Imports next year will slow down as the market has to digest large stocks after excessive imports in the current year. Domestic soy supply will be ample next year,” said an analyst with the centre.
China’s soy imports from August onwards are likely to fall. Imports in August are seen at about 6.2 million tonnes, down from a record monthly import of 7.47 million tonnes in July, it said.
Beijing has been releasing its state soy reserves to the market since May.