China has delayed or sold back at least six soyabean cargoes for July and August shipment and may have to delay new cargoes for September amid weak demand for pig feed and a glut of imports, grain sources said on Thursday.
That could mean Chinese soyabean imports will show only lacklustre growth of under 3 percent this marketing year, after rising strongly in the last decade due to increasing consumption of meat and edible oils.
"One single buyer had delayed five to six cargoes. Soyameal demand is just not growing, not like past years with 10 to 15 percent growth (per year)," one trader with an international trading house said. Other analysts said as many as 10 cargoes may have been delayed or scrubbed.
Crushers' appetite soured after a surge in Chicago soyabean futures last week squeezed crushing profit margins. They had been relying on strong oils prices to stay profitable this year, since domestic soyameal prices have been depressed by weak demand thanks to widespread pig disease.
"Crushers may scrap more cargoes. Soyaoil prices have been pressured by big imports in coming months," a grain source said. Soyaoil imports could reach 800,000 tonnes from July to September, compared with 1.1 million tonnes in the first half of the year, after high domestic oils prices in May spurred importers to book cargoes.
Outbreaks of blue ear disease have led to a shortage of piglets and sows and the restocking of the pig population is taking longer time than expected, depressing demand for soyameal.
"Farms want to restock pigs, but they cannot source enough piglets. Piglets were booked even before they were born," said Zhang Liwei, an analyst with China National Grains and Oils Information Centre. "Feed production for pigs has fallen a lot because of the disease. We do not expect any growth in soyameal demand this year," said Zhang.
Zhang said the pig population was unlikely to recover until the second half of next year. Feed officials said the country's pig population fell by 25 percent to about 300 million heads from some 400 million heads before the outbreaks of the highly contagious disease. The agricultural ministry said on Wednesday the blue ear disease sickened 160,000 pigs in the first seven months of the year, of which more than 85,000 pigs died or were culled to prevent spreading the disease.
Feed officials said the disease has killed far more than the 1 million pigs estimated by the ministry since the nation-wide outbreak was first reported in May last year.
Analysts said the country's soyabean imports in August and September would be about 2 million tonnes each, bringing total imports in the year ending September to 29 million tonnes, up less than 3 percent from the previous year.
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