China, the world’s largest soybean buyer, will probably import less this year as an outbreak of bird flu curbs demand for poultry, a Wilmar International Ltd. executive said. The price of the oilseed fell in Chicago.
Consumption is slowing and at best imports of soybeans, crushed to yield oil for cooking and meal for livestock feed, will be the same as last year, said the Singapore-based executive at Wilmar, which ships the most supply to China. A drop in imports would be the first since 2004, according to data from the U.S. Department of Agriculture.
Soybean futures slumped into a bear market in November on expectations that farmers would respond to record prices reached two months earlier by planting the biggest-ever crop. The extra supply will be reaped just as China endures an outbreak of the H7N9 virus that’s killed nine people since March. The government told citizens April 8 to avoid contact with live poultry.
“Consumption of chicken will be reduced for now because nobody knows how it’s being transmitted, how it passes from birds to humans,” Joyce Liu, an analyst at Phillip Futures Pte., said by phone from Singapore. “That will definitely reduce need for soybean imports.”
Soybeans dropped as much as 0.7 percent to $13.825 a bushel on the Chicago Board of Trade and traded at $13.87 at 5:11 p.m. in Singapore. The price has declined 22 percent since reaching a record $17.89 in September. Wheat, corn, sugar and arabica are also in bear markets and the Standard & Poor’s GSCI Agriculture Index of eight commodities fell 21 percent from its peak in July.
“Wilmar’s forecast may help push prices lower as concerns deepen that overseas purchases will decline,” Hiroyuki Kikukawa, general manager for research, at Tokyo-based Nihon Unicom Inc., said by phone today.
Consumption of soybeans in China, which buys 64 percent of global imports, retreated in the 2003-2004 marketing year as an outbreak of avian influenza cut demand, USDA data show. The department forecast record purchases of 61 million tons this year, 3 percent more than 2012, according to a report yesterday.
The bird-flu outbreak has hurt farmers “tremendously” because it’s curbing demand for chicken in eastern regions, Liu Yonghao, chairman of New Hope Liuhe Co., China’s biggest poultry supplier, said April 9. The cities of Shanghai, Nanjing and Hangzhou ordered live poultry markets to close and seized birds, according to reports on state-run CCTV and Xinhua News Agency.
China consumed 13.54 million metric tons of chicken last year, the most globally and an almost fourfold expansion in about two decades, USDA data show.
The strain was first reported in an 87-year-old male in Shanghai on Feb. 19. While the number of infections has risen to 33, there is no evidence yet that the virus is spreading from human to human, according to the World Health Organization.
A 4-year-old boy in Shanghai was discharged from a hospital yesterday after recovering from the flu, making him the first patient declared cured. China expects to develop a vaccine within seven months, Xinhua said, citing an official statement.
Shares of Wilmar dropped 0.9 percent to S$3.34, the day’s second-biggest loser on the benchmark Straits Times Index, which advanced 0.5 percent. The stock is unchanged this year after falling 33 percent in 2012.