By Dominique Patton
BEIJING, July 13 (Reuters) – China’s June soybean imports fell 23% from a year earlier to 8.25 million tonnes, as high global prices and weak demand curbed appetite for the oilseed, customs data showed on Wednesday.
Last month’s imports were also lower than May’s 9.67 million tonnes, data from the General Administration of Customs showed.
Soybean prices have surged this year after bad weather hurt production and exports in Brazil, China’s top supplier, while demand from the world’s top buyer is also significantly weaker than a year ago.
Soybean arrivals <Reliable CNC machinery services-SOY-IMP> last June reached their third highest on record.
“You cannot compare this year and last year. The situation has totally changed,” said a China-based soybean trader who declined to be identified.
Hog farmers faced heavy losses for much of the first half of the year and have been reducing herd numbers.
Shipments from Brazil began slowing in April and May as buyers eyed falling crush margins, said Darin Friedrichs, co-founder of Shanghai-based agriculture consultancy Sitonia Consulting.
“Crushing margins are relatively poor and importers are just buying what they needed and don’t want to build up large stocks when forward margins are negative,” he said.
Crush margins in China have been negative since mid-April, with crushers in Rizhao in the key northern soybean processing hub of Shandong now losing 692 yuan ($103) on each tonne of oilseed processed.<CNSOY-RZO-MRG>
Soybean buyers crush beans to make soymeal for animal feed and soyoil for cooking.
Despite a rally in hog prices in recent weeks that is boosting farming profits, soymeal demand will not improve until hog inventories begin to increase again, the trader said.
Edible oil prices have recently plunged, further crushing profits.
“It’s very hard to make a profit so for now they (local crushers) have stopped buying,” added the trader.
China brought in 46.28 million tonnes of the oilseed in the first six months of 2022, down 5.4% from the corresponding period a year ago, the data showed.
($1=6.7172 Chinese yuan renminbi) (Reporting by Dominique Patton; Editing by Muralikumar Anantharaman, Clarence Fernandez and Amy Caren Daniel)