China, the world's largest soya buyer, is on track for record soyabean import bookings in 2010/2011 (September-August) after the current year's estimated 52 million tonnes, also a record, due to the rapid expansion of its domestic crushing industry, a senior trader said.
"We think it is possible that China's imports in 2010/2011 may reach 55 million tonnes," Frank Zhou, a soya trading manager with Cargill Investment (China) Ltd, told JCI conference over the weekend. Chinese buyers have already booked 12 million tonnes of new US crop for 2010/2011 shipment and 8 million tonnes of South America's 2011 new crop, said Zhou.
"Judging by this purchasing pace, it is hard to believe that next year's imports would be lower." Luan Richeng, vice president at Chinatex Corp, agreed and said China's daily crushing capacity - which will hit 350,000 tonnes in 2011, will continue to boost the country's soya imports to 55 million tonnes. Luan's speech, a copy of which was seen by Reuters, was scheduled to be delivered to a trade forum on Monday.
But Zhou acknowledged that most other crushing officials estimating that imports could be flat or lower than this year's level of 52 million tonnes. Traders are still concerned about possible sales of state soya reserves, although government authorities and crushers in the north-east could not agree on an appropriate level of subsidies, traders said.
Beijing holds between 5 million and 6 million tonnes of domestic soya reserves and has to release a large amount of that before the new harvest or early next year because most of that has already been in storage for two years and the quality will begin to suffer, said Li Qiang, president with Shanghai JC Intelligence CO. Ltd (JCI).
A sizeable release could lead to a decrease in imports next year, Li said. Zhou said China's annual soya crushing capacity may reach 100 million tonnes next year with capacities growth mainly in the coastal provinces of Shandong and Guangdong as well as provinces along the Yangtze River.
He said the increase was also due to an expansion of China's big feed mills, which use more protein-rich feed ingredients. "We do not see a big increase in soyameal exports, which indicate that domestic soyameal consumption is growing, particularly by big feed mills," one trading executive told Reuters.
"Many crushers, no matter big or small, private or state-owned, are expanding their capacities." Soyameal, the cheapest animal protein, is increasingly being used by feed mills to replace expensive cottonseed meal and rapeseed meal, traders said.
Both Zhou and Luan expected China's soyaoil imports in 2011 would decline because the crushing industry could produce enough to meet domestic demand. China over past years has had to import a large amount of soyaoil to meet the supply gap.
Soyaoil imports this year could fall below 1.5 million tonnes, estimated Chinatex's Luan. China imported 2.39 million tonnes of soyaoil in calendar year 2009. This year's decrease was partly due to Beijing's ban of soyaoil imports from Argentina, the world's largest exporter, over a trade dispute.
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