Chinese soybean imports last month rose sharply to 7.72 million tons, up nearly 8% from the volume in August this year, according to latest data from the General Administration of Customs.
Nearly 5.6 million tons of soybean imports in September were from Brazil while US soybean totaled 1.15 million tons during the same month. Imports of Argentinian and Uruguayan soybeans were 416,000 tons and 481,000 tons respectively.
September imports this year were also up 12% compared to the same month last year and beat market expectations of around 6.5 million tons by a decent margin.
Nevertheless, the sharp increase of soybean imports this September was against a low benchmark as figures for August 2022 and September 2021 were all below the five-year average.
China’s soybean imports in the month of September between 2017 and 2021 averaged 8.2 million tons, while imports during the month last year was just 6.88 million tons.
Low imports in the past two months have been largely reflected in the domestic market with front-month futures and cash prices for soybean meal up significantly compared to futures prices in the first quarter of 2023.
The spread between November 2022 and January 2023 soybean meal futures contracts on Dalian Commodity Exchange widened to a record level of 1,001 yuan/ton ($139/ton) in mid-October, underlining a short-term supply tightness.
Concerns of soybean supply shortage in China were further intensified by low water draft issue in US Mississippi River in the first week of October as the flow volume of barges transporting grains were slashed.
The low draft issue in the US is still present as of this week and has showed no signs of significant improvement is the past two weeks. This could further delay soybean and corn shipments from the US Gulf to China.
Many Chinese importers have switched their buying interest to US Pacific Northwest for faster shipments.
Soybean imports into China during October this year are expected to be 5-6 million tons, according to several traders.