China, the world's top soya importer, has been slow in booking oilseed from the United States as a rally in Chicago squeezes crushing margins amid a slow recovery in domestic demand for animal feed.
Industry officials and traders said the crushing plants were shifting to domestic beans, where possible, as domestic soya was priced 300-400 yuan ($37.5-$50) a tonne cheaper than the oilseed imported from the United States or South America.
"The meal demand is okay, but it's not great. The aqua season has just ended. The pick-up in the poultry is not enough to cover that," said an executive at a plant in southern China. Asked about the crushing margins, the executive said: "It's not that great. The CBOT is going up and domestic meal prices are not following."
With US soya premiums, including cost and freight, at about 175 US cents per bushel over the CBOT January, few were willing to book more December cargoes, despite a peak consumption expected in the run-up to the Lunar New Year in February.
In addition to the end of the season for fish farming in northern China, many were also concerned about large imports of soyaoil, sporadic outbreaks of hog diseases, including foot-and-mouth diseases, and possible outbreaks of bird flu.
Traders estimated China had booked at least 100,000 tonnes of Argentine crude soyaoil for each of the November and December shipments as domestic vegetable oil prices went up by nearly 1,000 yuan ($125) a tonne in the past month.
With domestic feed output seen flat at best, some officials now wonder where meal is going, especially as China imported 663,869 tonnes of meal, on top of soya imports of 21.25 million tonnes in the first nine months, up 8.8 percent year-on-year.
"I am confused," said a trader at a Chinese house based in the north, referring to a report about an 8 percent decline in China's animal feed output in the year ended September 30. The trader said part of the meal might be replacing fishmeal as international prices jumped by about 50 percent this year. Port stocks of imported soya were also up by 1.5 million tonnes compared with the year-ago levels. Official data showed China's fish meal imports sagged by 37.1 percent to 880,000 tonnes during the first nine months.
Last month, the Chile National Fish Association said fish meal prices jumped 51.7 percent to $951/tonne this year, in part due to falling production from the No 1 fishmeal producer Peru. Asked about the domestic soya this year, another executive at a plant in north-eastern China said: "The crop size was a bit smaller, but the quality is not bad. "We are using more domestic beans. It's impossible to cover costs, if you crush imported beans (though) demand for oil has remained strong since the national holidays in October." The traders said, however, that China was no longer interested in Argentine soyaoil as prices had gone up to about $650 a tonne, including costs and freights.