China's July soybean imports from Brazil drop on poor crush margins

BEIJING: China's soybean imports from top supplier Brazil fell in July from the previous year, customs data showed on Friday, as poor crush margins weighed on demand.

China, the world's top buyer of soybeans, brought in 7.88 million tonnes of the oilseed from Brazil in July, down 3.7% from 8.18 million tonnes a year earlier, according to data from the General Administration of Customs.

Chinese crushers stepped up purchases of soybeans from the South American country in the earlier months of the year to profit from good margins, driven by a fast recovering pig herd.

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Demand from the livestock sector has, however, weakened lately as hog margins fell to negative territory on plunging pork prices.

For July, China's soybean shipments from all origins totalled 8.67 million tonnes, down 14.1% from the previous year.

China also imported 42,277 tonnes of soybeans from the United States in July, up from 38,331 tonnes in the same month a year earlier, according to customs data.

Crush margins in Rizhao, Shandong province, a major soybean processing hub in northern China, hit their lowest levels on record in late June, before climbing back up.

Crushers there would still lose about 176 yuan ($27.07) from each tonne of soybean crushed.

China's soybean imports are expected to slow in the next few months of the year as falling hog margins and a rise in wheat feed use continued to crimp demand for soymeal.

China's sow herd, which had been rising for 21 months, fell for the first time in July from the previous month, after a plunge in hog prices pushed many farmers to get rid of unproductive sows.

Hog margins in Sichuan, a top pig producer in China, fell to negative 134 yuan, from around 2,566 yuan at the beginning of the year.