Soybean imports by China in 2021 fall 3.8%

China’s soybean imports in 2021 fell from a year earlier, the first annual decline since 2018, customs data showed on Friday, depressed by weakening demand from the swine sector.

China, the world’s biggest buyer of soybeans, brought in 96.52 million tonnes of the oilseed in the 12 months of 2021, down 3.8% from 2020’s 100.33 million tonnes, data from the General Administration showed. of Customs, with a drop in swine margins and an increase in the use of wheat as animal feed, putting pressure on consumption.

Processors cut soybean purchases in the second half of the year as crushing margins worsened due to rising import costs and low domestic soybean meal prices, said Zou Honglin, an analyst at Mysteel’s agricultural division, a China-based commodity consultancy.

“Domestic hog prices have dropped, pushing down hog margins and lower demand for soybean meal. The practice of using wheat to replace some corn in the feed has also reduced demand for soybean meal,” Zou said.

December imports, however, were up 18% year-on-year to 8.87 million tonnes. The numbers also increased from November shipments, the data showed.

“September and October imports were especially weak. Live hog prices dropped sharply in the first half of the year and importers didn’t want to bring in a lot of soybeans because there was a lot of uncertainty about feed demand,” said Darin Friedrichs, co-founder of agricultural research firm Sitonia Consulting.

“It also appears that the purchase of US Gulf product has been slow due to disruptions in logistics. Many buyers have decided they can wait until the new crop in Brazil. This could create an interesting situation depending on how the heat wave and losses crop to develop in South America,” said Friedrich.

Shipments from the United States in the 2021/22 marketing year were reduced due to delays in loading at ports following Hurricane Ida and a soybean crop in Brazil in early 2022.

However, drought in key soybean producing regions of Brazil, China’s biggest supplier of the oilseed, could see average yields hit a six-year low and reduce production this season from previous estimates.

China’s soybean imports hit an annual record in 2020 as processors ramped up purchases thanks to healthy demand from a hog herd quickly recovering from outbreaks of African swine fever.

A growing hog oversupply, however, slashed profits and sent crushing margins into negative territory in 2021. They fell to record negative lows of 650 yuan ($102.19) a tonne in June. .

Collapsing profitability in the hog sector and a sharp rise in the use of wheat in feed have reduced demand for soybeans, with analysts predicting by mid-2021 that China’s soybean imports for the year could be below 100 million tonnes.

Demand for wheat as a raw material could wane in the new year as corn prices tumbled after a bountiful harvest, while Beijing recently banned feed producers and consumers from participating in auctions for wheat from state reserves.