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 China's Soy Imports for May Hit 4-Year Low as Virus Kills Hogs

10.06.2019 (Bloomberg) - China’s soybean purchases dropped 24% in May from a year earlier after the spread of African swine fever hurt demand for the animal feed ingredient, and as the trade war with the U.S. led the world’s biggest buyer to halt purchases of American beans.

  • China bought 7.36 million tons of soybeans last month, the lowest for May since 2015, according to official customs data.

Key Insights

  • The purchases slid because processing plants are cautious about demand for animal feed due to swine fever, said Monica Tu, an analyst with Shanghai JC Intelligence Co.

  • While China has been loading cargoes of U.S. soybeans that were bought earlier this year, it hasn’t booked any more cargoes since.

  • Chinese companies have increased purchases from South America, with June imports seen at 8.3 million tons and at 9.5 million tons for July, said Xie Huilan, analyst with industry portal

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  • Soy imports in the first five months of 2019 dropped 12.2% year-on-year to 31.75 million tons.

  • Edible vegetable oil imports in May were 708,000 tons, the highest since January. China imports mainly palm oil.

  • The outlook for China’s soybean imports for the year ending September was cut by the China National Grain and Oils Information Center to 84 million tons.

    • Still, soy imports in 2019-2020 may rise to 89 million tons as farmers breed fatter pigs, which may push up demand for soybean meal, according to CNGOIC last month.