CHINA, the world s biggest soybean buyer, will face increasing difficulty meeting its surging demand for imports as global competition for the oilseed grows, a Cofco Ltd. official said.
The oilseed processing industry will face a big problem: raw material supply, Chang Muping, Cofco s deputy general manager of oilseed processing, said in Guangzhou over the weekend. Crushers inside and outside China are competing for raw material.
China s soybean imports have jumped this year as crushers, spurred by good margins, raced to secure supply. Processors increased purchases of new-crop South American soybeans by 25 percent from a year earlier, the China National Grain & Oils Information Center said Oct. 25.
As reflected in the pace of buying, more and more companies are buying further into future months and purchases are bigger, Chang said. While Chinese crushers once bought beans a few months before shipping, they now buy half a year or more before delivery, he said.
The premium for U.S. soybeans in the past two years has been as high as 120 cents, compared with 40 cents to 50 cents a few years ago. Brazilian supplies used to carry a discount to benchmark, and they now command a premium, Chang said.
Rising biodiesel production in soybean-growing countries has left less soybean oil available for export, Chang said.
Soybean consumption in China will climb because rising incomes mean the Chinese are eating more oil-rich foods and meat, produced using oilseed byproducts, he said.
The country s domestic soybean output growth is limited by declining area for cultivation and lower incomes from oilseeds compared with other grains, Chang said. (SD-Agencies)
