China’s June soy imports jump ahead of tariffs on U.S. shipments
China’s soybean imports in June jumped 13.1 percent from a year ago as buyers scooped up Brazilian supplies to avoid potentially higher costs on U.S. soybeans that are subject to Beijing’s tariffs, customs data showed on Friday.
China, the world’s top soybean buyer, brought in 8.7 million tonnes of soybeans last month, up from 7.687 million tonnes a year ago, according to data from the General Administration of Customs.
However, shipments were down 10.1 percent from last month’s 9.68 million tonnes, the data showed.
Beijing vowed in June to impose 25 percent tariffs on a list of U.S. goods including soybeans, and implemented the penalties on July 6 in response to U.S. duties on a similar amount of Chinese goods.
“The figures were within market expectation. Everyone is bringing in large volume of Brazilian beans and building up more stocks in advance on worries of the trade spat,” said Tian Hao, senior analyst with First Futures.
The buying spree, mainly of Brazilian beans as they were in season, pushed up prices for the oilseed from the South American country as well as for soybean stocks in China.
The spread between U.S. and Brazilian soybean prices offered in China rose to a five-year high in June as the trade spat deepened and buyers chased Brazilian beans.
“Arrivals will remain high in recent months. Stocks of soybean, soybean meal and soybean oil are all very high. Crushers are struggling with crush margins under such huge stocks,” Tian said.
China’s national soybean stocks as of Tuesday were at 8.52 million tonnes, nearly a month’s worth of consumption, and the highest on record since at least 2010. Stocks have risen more than 50 percent since the middle of April, when the trade spat between the world’s top two economies first escalated.
Crush margins of the oilseed, pressured by high stocks and losses in the pig farming sector, have been negative since late April.
Soybeans, crushed to make cooking oil and the protein-rich animal feed ingredient soymeal, were the biggest U.S. agriculture export to China last year at a value of $12.3 billion, according to the U.S. Department of Agriculture.
China, which imports 60 percent of the soybeans traded worldwide, bought 32.9 million tonnes from the United States in 2017, accounting for 34 percent of the total purchases.
Imports of vegetable oils in June were 529,000 tonnes, down 11.8 percent from the previous month but up 35.6 percent from a year ago.