Soybeans to remain pricey
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The uptrend in soybean prices is expected to continue due to rising domestic demand and the possible impact on global food prices from Russia's ban on wheat exports, analysts said.
China, the world's largest soybean importer, purchased a record amount in the first seven months of this year, mainly from the United States, Argentina and Brazil.
China's soybean imports increased 16.2 percent year-on-year to 30.76 million tons in the first seven months, and average imported prices climbed 4 percent to $439 per ton during the same period, according to statistics released on Tuesday by China's Customs.
"It's an extremely sensitive time as so many uncertain factors could impact on soybean prices," said Zhang Xiaoping, deputy director of American Soybean Association International Marketing.
After Russia said it would ban grain exports due to a severe drought, wheat futures soared on the global market. Analysts said this would also lead to price hikes for corn and soybeans.
Zhang said the good news is that this year is expected to be a bumper one in the main soybean production areas in the US if there are no weather problems.
The harvest season for soybeans is the end of August or early September.
About half of China's soybean imports are from the US, which are expected to hit 23 million tons this year, Zhang said.
China's imported 42.55 million tons of soybeans last year, up 13.67 percent over 2008. This year, the nation is expected to import around 50 million tons of soybeans, the China Soybean Industry Association said in late July.
"China buys more than half of the world's soybean exports and China's increasing demand will support global soybean prices and futures," he said.
The high level of soybean imports is also partly due to China raising the quality threshold for soybean oil imports from Argentina in April.
"The move fueled speculation that more soybeans will be needed this year to make oil and many companies ordered more soybeans," said Liu Zhaofu, general manager of China's Soybean Net.
It takes at least six weeks to ship the soybeans to China, so shipments in June and July soared, Zhao said. China imported 4.9 million tons of soybeans in July and a record of 6.2 million tons in June.
China has yet to reverse the decision on soybean oil imports from Argentina.
Domestic soybean yields declined more than 10 percent in 2009 and yields will remain largely unchanged this year, according to China Soybean Industry Association.
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