September 16, 2014

After 2013/14 saw record U.S. soy shipments to China, slowing demand from China’s livestock industry has resulted in an oversupply of soybeans in the country, lowering demand.  Chinese imports of U.S. soybeans could fall by a quarter for the crop year beginning this month as a bumper U.S. crop has caused processing margins to plunge to their lowest in two years leaving U.S. processors unable to cover the cost of edible oil or animal feed production.  According to an unnamed senior official in the industry the first half of 2014 has been extremely negative for the industry and neither demand nor prices are expected to increase in the near future.  China’s tightening of restrictions on commodity financing trade has caused some importers to default on shipments and will strongly affect soybean shipments for October through December – historically a period when soybean shipments recover and gain strength.  In 2013/14 China imported 27 million tons of soybeans from the U.S. as buyers turned away from South American sources because of difficulties at ports in Brazil.  A trade source in China claims that these imports could fall to 23 million tons in 2014/15.

Read the article

To receive relevant news stories with summaries provided by GAI Research & Insight, subscribe to Global AgDevelopments, our free weekly enhanced eNews service