China, the world’s top soybean importer, brought in 9.67 million tonnes of the oilseed in May, up from 8.08 million tonnes in April, data from the General Administration of Customs showed.

The May figures, slightly higher than 9.61 million tonnes a year earlier, were on the high end of market expectations. Poor crush margins in China have weighed down demand from crushers.

“May imports were up marginally compared to last year, however some of that increase is likely shipments that were delayed in unloading due to the COVID situation and port congestion and are showing up in the data now,” said Darin Friedrichs, co-founder of Shanghai-based consultancy Sitonia Consulting.

“Soybean exports out of Brazil have dropped notably in the past two months, but that decline is too recent to be reflected in this May import data,” Friedrichs said.

China’s soybean imports during the January-May period came in at 38.04 million tonnes, down 0.4 per cent from the same period a year earlier, customs data showed, as high soybean costs and flat demand from the feed sector curbed crushers’ appetite.

Soybean arrivals were lower earlier in the year as bad weather delayed harvesting and exports in Brazil, China’s top supplier of the oilseed, sending Chinese soymeal prices to record high levels.

Imports later picked up as delayed cargoes cleared customs but demand was still flat as crush margins largely remained in negative territory.

Crushers in Rizhao, Shandong province, a key soybean processing hub in northern China, are losing 9 yuan ($1.35) per tonne of the oilseed processed, versus a record high of nearly 1,500 yuan of profit in March.

“As soybeans arrived in large volume, soybean meal inventories at crushing plants continued to rise. Demand from the end users was still flat, adding downward pressure to cash soymeal prices,” said Zhu Rongping, analyst with the agriculture section of Mysteel, a China-based consultancy.

Source: Reuters