BEIJING, China (Reuters) — China’s monthly imports of soybeans in May, June and July are expected to rise to between 6.5 million and 7.5 million tonnes.
It would be an increase of at least 45 percent from March.
The imports will mostly come from South America and could lead to excess supply in China that would reduce demand next fall when the large U.S. crop is ready for export .
Domestic demand for soy meal is likely to stay weak for at least the next three months, said Guo Feng, general manager with the state-owned Chinatex Edible Oil Co. Ltd.
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China imported 4.49 million tonnes of soybeans in March, official customs data showed.
Guo said the subdued demand for soymeal in the coming months stemmed from reduced consumption at hog farms.
“Hog stocks have fallen 20 percent, which is in addition to a decrease of sow stocks. We look bearish over soymeal demand in coming months,” Guo said.
“With soy imports seen up by 40 percent or even 50 percent, the soymeal demand even in the peak consuming season may not increase by more than 15 percent from the level in March or April.”
The hog breeding industry is the major consumer of soymeal, a protein-rich feed ingredient.
However, China’s hog stocks have fallen to their lowest level in a decade, and the number of sows has fallen for more than 18 months in a row.
The weak demand could increase the country’s soybean stocks by as much as 3.5 million tonnes by the end of July, said Guo.
A slow breeding recovery in the world’s largest pork consumer could hurt China’s demand for soybean in the fourth quarter of the year when the United States, the world’s second largest exporter, is selling its new crop.
Hog breeders suffered their worst losses in three years last year following the overall economic slowdown, said one analyst with China National Grain and Oils Information Centre.
