July 22 (Bloomberg) -- Soybean buyers in China, the world’s biggest consumer, are increasing imports as demand for animal feed rises and falling prices boost processing margins, according to a Bloomberg News survey.
China bought about 2 million metric tons of the oilseed last week after prices declined earlier this month to the lowest in almost four years, according to a Bloomberg News survey of five buyers and analysts based in the country. Imports in the year beginning Oct. 1 may rise 7 percent to 73 million tons, the survey shows.
“With demand for animal feed making a recovery, the lower import costs should help improve the crush margins,” Monica Tu, an analyst at Shanghai JC Intelligence Co., said by phone yesterday.
China’s imports will help absorb a global glut of the oilseed and slow a further slide in prices, which fell 7.5 percent this month in Chicago. The country buys more than 60 percent of the world’s traded soybeans. The U.S. Department of Agriculture projected July 11 a record worldwide inventory next year of 85.31 million tons. The U.S. soybean crop is in the best shape for this time of year since 1994, USDA said yesterday.
The average price of pigs in China may increase 18 percent in the second half of this year and could rise further in 2015, according to a report today by Beijing Boyar Communication Co., an animal husbandry researcher. Poultry production is also becoming more profitable, prompting farmers to boost inventories, Tu said.
By buying U.S. futures and selling products including meal and oil, some processors last week profited as much as 175 yuan ($28) a ton for shipments after October, Tu said.
Soybeans for November delivery on the Chicago Board of Trade fell as much as 0.5 percent to $10.665 a bushel today. Soybean meal in Dalian was up 0.1 percent at 3,197 yuan a ton at 2:44 p.m. in Tokyo.
Last week, U.S. exporters reported combined sales of 1.768 million tons, including 1.064 million to China and 704,400 tons to unknown destinations, according to the USDA. Exporters also sold 120,000 tons to China for delivery before Aug. 31, the USDA reported yesterday.
The USDA on July 12 also projected China’s 2014-2015 imports at 73 million tons.