China's 2023 soybean imports seen at record 105 mln metric tons on strong Q4 arrivals

Credit: REUTERS/Tingshu Wang

By Mei Mei Chu and Naveen Thukral

DALIAN, China/SINGAPORE Nov 2 (Reuters) - China's soybean imports are likely to stay high through the fourth quarter, taking 2023 purchases to an all-time record, but lacklustre demand from loss-making hog farms is seen reducing purchases in early 2024, traders and analysts said.

Record Brazilian soybean supplies are expected to dominate China's imports in the last three months of the year, they said, citing better oil and meal quality, reducing demand for U.S. cargoes in the world's biggest market for the oilseed.

The larger share of Brazilian soybeans in China's import basket is likely to add pressure on benchmark Chicago futures Sv1 which have slumped nearly 15% this year, snapping a four-year rally.

"The sustained and rapid development of China's feed industry is keeping our soybean imports at a high level," Zhang Liwei, chief engineer of China National Grain and Oil Information Center, said at a industry conference in Dalian.

China is by far the world's top importer of soybeans, buying more than 60% of the oilseed shipped worldwide to crush into meal for animal feed and oil for cooking.

Typically, freshly harvested U.S soybeans dominate the global export market from September as the Brazilian export season winds down. But this year China's purchases from the U.S. are well below normal.

China will import around 26 million during the last three months of the year, with around 45% of the volumes arriving from Brazil, based on the forecasts of four trading sources.

October arrivals are seen at 6.5 million metric tons, November at 10 million metric tons, with December pegged at 9.5 million metric tons, according to a Shanghai-based trader with a global trading house.

That would bring China's total imports in 2023 to a record high of around 105 million metric tons, up 15% from 91.1 million metric tons last year.

China's soybean imports in January-September 2023 jumped 14.4% year-on-year to 77.8 million tons, according to customs data. CNC-SOY-IMP

"The price spread between Brazilian and U.S soybeans has narrowed as it is the U.S harvest season," a Singapore-based trader said. But crushers still prefer Brazilian beans due to better oil and meal quality in the beans, he said.

COFCO market research department manager Xu Qiaoping said fourth quarter demand is supported by stable soymeal consumption to feed the country's large pig herd, even though procurement for early 2024 is expected to be lower as loss making livestock farmers cut back on purchases.

(Reporting by Mei Mei Chu and Naveen Thukral;)

((meifong.chu@thomsonreuters.com; Reuters Messaging: @meixchu on Twitter))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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