Oil World Cuts China Soy Imports Outlook on South America Delay

Chinese soybean imports may be smaller than previously estimated because of insufficient shipments from South America, Oil World said.

China, the world’s biggest soybean consumer, may import 59 million metric tons of the oilseed in the 2012-13 season that began Oct. 1, down from 60 million tons forecast three weeks ago, the Hamburg-based researcher said in an e-mailed report today. Imports from February through April may be 10.3 million tons, 24 percent less than the same time last year. Purchases this season may drop from 59.2 million tons in 2011-12, the first annual decline in a decade, according to the report.

South American shipments are beginning to accelerate as Brazilian suppliers transfer more soybeans to the country’s southernmost port in Rio Grande do Sul to avoid bottlenecks at Paranagua and Santos, Oil World said. Argentina’s harvest was 24 percent complete as of April 11, ahead of last year’s pace, it said, citing the Bolsa de Cereales de Buenos Aires. Oil World pegs Brazil’s crop at 81.3 million tons and Argentina’s at 48.5 million tons, below U.S. Department of Agriculture forecasts.

“China is in a big dilemma because actual arrivals of soybeans will stay considerably below requirements at least until the end of April and most likely also in May,” Oil World said. “South American exports are now picking up but are still insufficient.”

Soybeans Drop

Soybean futures have declined about 2.5 percent this year on the Chicago Board of Trade as South America’s harvest rebounded from drought last year while an outbreak of avian influenza in China raised concern that livestock and poultry feed demand would decline. The impact of the flu crisis is still uncertain, Oil World said.

While Chinese monthly demand for soybeans is at least 6 million tons, imports likely will be “at best” 3.6 million tons in April, with 800,000 tons coming from the U.S. and the remainder supplied by South America, Oil World said. In April 2012, China imported 4.9 million tons of soybeans. The shortfall in purchases “will result in a further massive decline in total Chinese stocks in April,” it said.

Soybean production in South America’s top five producing countries may be 143.6 million tons, less than the USDA’s combined estimate at 148.75 million tons, Oil World said. Production in Brazil, the top grower, has been reduced by dry weather in northern regions, while Argentina’s output may be affected by dry weather in the north and heavy rain and floods in Buenos Aires province and parts of Santa Fe and Entre Rios.

Uruguay’s soybean crop estimated at 2.6 million tons may be only 2.5 million tons because of dry weather, Oil World said. The researcher raised its forecast for Paraguay to 8.5 million tons. Bolivia’s yields also have been higher than expected, and Oil World pegs the country’s crop at 2.7 million tons.

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