China's soybean imports are forecast to climb 6 percent in the year to September 2016 on higher demand for animal feed, while corn purchases will decline as the country takes steps to cut domestic inventories, a senior industry official said. The country is expected to buy 83 million tonnes of soybeans in 2015/16, up from 78.35 million tonnes a year ago, Wang Lin, managing director of COFCO Futures said on Wednesday.
That compares with 80.5 million tonnes of Chinese soybean imports as estimated by the US Department of Agriculture (USDA). China buys 60 percent of the soybeans traded world-wide. "Hog margins are attractive, (and) we expect hog feed demand in China to increase slightly," Lin told an industry conference in Singapore. Soybeans are crushed to produce oil, used mainly in cooking, and meal, a key source of protein in animal rations.
In calendar year 2015, China's soybean imports rose 14.4 percent to a record 81.7 million tonnes, according to customs data, as hog breeders expanded their herds. Also expected to encourage Chinese imports, the benchmark Chicago Board of Trade most-active soybean contract dropped to its lowest since early January this week on prospects of near record supplies from South America.
For corn, Lin said China's imports are likely to be subdued as it takes steps to cut domestic stockpiles. "There will be import quotas for corn but purchases will be reduced as government encourages the use of domestic corn," he said. Corn dropped to its lowest since mid-January on Tuesday, falling for a fifth straight session. China will unveil its state corn price policy as early as next month to make domestic prices low enough to keep imports outside the country. The country has accumulated large corn stockpiles following successive bumper harvests, and at the same time, imports increased last year as local prices were much higher than the international market.
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