• Condensed by Lynda Kiernan

Processing Losses Drive Chinese Buyers to Push Back Soybean Imports


Significant losses for Chinese soybean processors have driven the country’s grain buyers to pushback or cancel soybean shipments predominantly ordered from Brazil.

Strong crushing profits at the beginning of the year drove China’s buyers to capitalize upon low prices and place aggressive buy orders. However, in the ensuing months, the price pendulum swung massively in the opposite direction to the biggest losses in three years.

Soybean processors in Shandong province in the eastern region of the country are losing $43 per ton of soybean processed - the worst return since September 2014.

These market conditions are leading traders to believe that soybean cargoes equaling between five to seven panamax ships (each ship containing 60,000 tons of soybeans) will be canceled.

As previously bought shipments continue to arrive, Chinese soybean imports reached a record for the month of April at 8.02 million tons, and imports in the month of May are expected to be between 9 and 9.5 million tons. However, these imports are expected to begin falling in the third quarter of the year.

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Lynda Kiernan is Editor with HighQuest Group Media and of the Oilseed & Grain News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@highquestgroup.com.

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