China Soy Imports Gain, Use Rises ‘Too Rapidly,’ Oil World Says
Soybean imports by China may rise about 40 percent in the fourth quarter and world consumption of products made from oilseeds has increased too quickly, resulting in diminished inventories, according to an Oil World report.
China’s soybean imports may top 14.2 million metric tons from October through December, up by 4 million tons from a year earlier, Oil World said. Stockpiles have been eroded “too rapidly,” resulting in higher prices for soybeans, rapeseed and sunseeds, the company said. Dry weather in South America will hurt crops and reduce production, Oil World said.
“The market is realizing that consumption of oilseeds and products has increased too much in recent months,” Oil World said. “The safety net is thus shrinking too fast, particularly considering the high risk of damage to crops in South America from dryness. Some rainfall is forecast for the affected areas, but an end to the dry spell in southern Brazil and central Argentina is not yet in sight.”
Soybean futures on the Chicago Board of Trade have gained 24 percent this year on rising demand. China is expected to import 57 million tons of soybeans in the marketing year that started on Oct. 1, up 13 percent from a year earlier, U.S. Department of Agriculture data show. Global consumption may rise 6.8 percent, the USDA said in a report on Nov. 9.
Palm oil, which competes with soybean oil, yesterday rose to the highest in 29 months on concerns that reduced soybeans output and rising demand for cooking oils will result in a shortage.
“The discounts of palm oil vis-a-vis competing vegetable oils have narrowed significantly in recent weeks as demand has become unsustainably strong,” according to the Oil World report. “The big jump of Malaysian palm oil exports by roughly 19 percent in November illustrates the strength of demand.”
The eight oils covered in the global outlook are soybean oil, palm oil, rapeseed oil, palm kernel oil, sunflower oil, coconut oil, groundnut oil and cotton oil.
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